New Revenue Source?

The Byron School District is facing a budget crisis, and because of it, the School Board may be authorizing sending a voter approved operating levy to the ballot this November.
Last week, the School Board was briefed on what different funding amounts would be should they decide to move forward with the ballot measure this fall.
“We’ve never had a voter approved operating levy before,” Superintendent Mike Neubeck said.
Budget Shortfall
About a week before the May 20 meeting, the School Board authorized making approximately $1.5 million in budget cuts for next year, due to budget shortfalls discovered late in the year, and because of projected shortfalls for the 2024-2025 budget.
Originally the Board authorized a recommendation on cutting up to $2 million, however, it was decided that went too far with the end of the school year rapidly approaching.
Superintendent Mike Neubeck in a newsletter said one of the reasons for the cut was due to the end of over $400,000 in Federal funding from COVID, a projected decrease in student enrollment, increases in health insurance for this year and next year, purchased service increases due to inflation, and “expenditures outpacing budget assumptions.”
As part of the cuts, over $900,000 will be coming from staff, with some coming from resignations and retirements not being filled.
Three general education teacher positions will not be filled following retirements/resignations, along with a counselor, special education teacher, five special education professionals, a special education bus para, and a media technician.
Positions being reduced include the Buildings and Grounds Manager, a School Resource Officer, two Administrative Assistants/Receptionists, and a Technology Support position, along with four evening custodians.
An additional $568,700 worth of cuts will be made from other reductions, including the elimination of a bus route, reductions to the athletic budget, technology budget, district-wide supply budget, among the 17 reductions.
The district also hopes to see a $149,000 increase in revenues, including from a $75 parking permit fee for high school students, increased athletic fees among other measures.
With the budget issues, it led to discussions occurring about looking to get more revenue for the District.
Different Types
Currently local taxpayers are on the hook for the $724 per pupil amount the School Board can tax for.
Other neighboring communities, however, have what is known as a voter approved operating levy.
Essentially it allows a School Board to ask voters to vote up or down, about whether or not they support additional per pupil funding, which would either come from local property taxes, and/or State funds.
For example, neighboring Hayfield, has a voter approved operating levy of $594.24, while Rochester’s is $942.50, according to the presentation.
Districts are also allowed to ask for voter approval on capital projects, such as Cannon Falls, which has both a $422.18 voter approved capital levy and a $500 operating levy.
While there haven’t been any formal recommendations at this time, and no decisions have been made by the School Board, Neubeck said at this time, they are leaning towards going with an operating levy vote, if anything.
“We probably will be going out for an operating levy compared to a capital projects levy… just because of what we need it for. “
In recent years, Neubeck noted voters approved the building projects, which went to referendum votes. The bond projects, however unlike capital project levies, were for one sole purpose.
Neubeck said the conversations now are to explain to the board, and the community, what the different possibilities are.
Vetting Process
If Byron voters are asked to approve any type of levy this Fall, or into the future, the biggest question will be, how much, and how it will impact taxes.
At the May 21 meeting, some of those types of questions were sketched out.
For example, it was noted that a house assessed at $350,000 would have an estimated tax bill of $310, if an operating levy for up to $500 per pupil was approved.
At a $1,000 additional per pupil additional funding the number would be $621.
It’s those types of numbers, the School Board will be vetting in the coming weeks, before a decision is made one way or another.
In addition to being vetted by the School Board, Neubeck said an additional committee will be taking a look.
“We also have a district financing facilities committee made up of staff members and community members that would be looking at what we need,” Neubeck said.
End of the year finances will also be a major factor.
“We also have to finish out this fiscal year for the most part, at least get closer to the end of our fiscal year to see how much of a shortfall that we have and look at our finances for next year to determine, how much we would be going out for or at least recommending to go out for,” Neubeck said.
Next Steps
Despite the election being months away, Neubeck said they are up against the clock, when it comes to timing.
In order to have the question on the November ballot, Neubeck said a decision would need to be made by July, in order to have the appropriate filing with the State.
For now, Neubeck said no official decisions have been made about what will take place.
“We probably won’t make that official decision and the amount until our July 15th meeting,” Neubeck said.
The School Board is expected to continue the discussions during its June 2 and 16 meetings.