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Higher valuations lead to bump in school district taxes

The Mitchell School District will receive 7 percent more in local taxes in 2018-19, with most of that difference provided in higher assessed taxable valuations.

The Mitchell Board of Education voted Monday to approve the district's budget for the K-12 schools and Mitchell Technical Institute during the board's regular meeting at the Mitchell Career and Technical Education Academy.

Overall, the school district has a budget of $30,711,724. The district is projecting to take in $19,027,967 in general fund revenues. The overall revenue breakdown calls for 47 percent of the funding to come from local sources ($14.1 million) and 38 percent from state sources ($12.1 million).

Of the $19 million in general fund expenditures, the district expects to spend 65 percent of the funds ($12.4 million) on instruction and 30 percent ($5.7 million) on support services. Overall, 81 percent of the district's general fund expenditures will be spent on salaries and benefits.

Property in the district's territory is estimated to go up in value by 6.6 percent in 2018-19 from $1.367 billion to $1.457 billion. Those valuations are broken into four major categories: agricultural land, owner-operated properties, commercial properties and utility properties, Business Manager Steve Culhane said.

The district's tax levies will see small increases in ag property and owner-occupied properties, with a 0.26 percent increase in ag property and 0.13 percent increase on owner-occupied land. On a property worth $100,000, a owner-occupied home will see a $47.44 increase in school taxes, while ag property valued at $100,000 would see an increase of $36.71. Commercial property will have no change in the levy rate.

"A big part of that is based on our growing tax base in Mitchell," said Board Member Neil Putnam.

The school district seeks $12,548,319 in taxes, a 7.34 percent increase over the $11,690,265 requested in 2017-18. That breaks down to $6,199,319 in general funds, $4,066,000 for the capital outlay fund, $2,283,000 for special education.

The school district is expecting $9,293,696 in state aid from property taxes, figured for the core cost of education formula used by the state. That is based on Mitchell's projected average daily membership of 2,785 students in the district and having roughly 185 staff members at a 15 to 1 student-teacher ratio.

"The state believes Mitchell can generate a little over $6 million in local property taxes, but the state makes up the difference of $9,293,696 in projected state aid, which will not be finalized until October," Culhane said.

MTI's budget calls for $13,223,210 in expenditures in the 2018-19 budget, with $7,073,303 to come through tuition, fees and local sources. The state's contributions are expected at $5,713,906 for MTI.

Other business

The board:

• Following an executive session, approved compensation increases of 1 percent for the following K-12 administrators: Superintendent Joseph Graves, MHS Principal Joe Childs, Mitchell Middle School Principal Justin Zajic and Business Manager Steve Culhane. The 1 percent increase is based on each administrator's salary and will include a one-time $500 bonus.

• A second reading of the Mitchell Technical Institute Policy Series 1000-1200 was approved in two separate motions. The MTI board policy to allow alcohol on campus during certain closed events was approved separately with Putnam's opposition.

• Approved renewal motions and participation agreements with the Associated School Boards of South Dakota for the workmen's compensation fund and for the Protective Trust South Dakota School District Benefits Fund for the 2018-19 school year. A 1 percent increase in insurance premiums is expected next year for participants in the plan.

• Cast votes for Randy Soma, of Brookings, and Paul Nepodal, of Deubrook Area, in elections for the South Dakota High School Activities Association Board of Directors.

• Passed a $437,650 supplemental budget amendment to be added to the district's general fund for the 2017-18 fiscal year.

• Approved the consent agenda, which included board minutes, claims, personnel and open enrollment requests.

• Heard board reports and the superintendent's report. In his superintendent report, Graves noted the Supreme Court's sales tax decision will be important for schools in the future in solidifying sales tax as a revenue source for education in the state. He said a windfall won't be expected but the decision "helps make sure that source will be there."