District finance director outlines preliminary levy timeline and state funding gaps ahead of September levy workshop

Chris Blackburn, the district’s director of business services, presented a preliminary‑levy briefing at the Sept. 4 board workshop, outlining timelines, how state revenue formulas affect district budgets and the options districts use to cover gaps in state funding.

Blackburn reminded the board that "by Sept. 30 each year, school districts must set their preliminary tax levy for taxes payable in the following calendar year," and that the Minnesota Department of Education issues preliminary reports to districts in early September. He said the board will be asked to set a preliminary levy at the Sept. 18 board meeting and that the final levies and the truth‑in‑taxation hearing are scheduled for December.

The presentation described structural funding pressures. Blackburn said that for fiscal 2025–26 the state increased the basic general education formula by 2.74 percent, adding about $142 per pupil, but he noted that the indexation has not kept pace with inflation. "Had the per pupil formula allowance kept pace with actual inflation ... we would have needed an additional $1,470 per pupil," he said, and he illustrated how that gap translates into millions of dollars across the district.

On special education financing, Blackburn told the board that Minnesota districts remain underfunded on special education costs. He said the state estimated a $726 million statewide underfunding in fiscal year 2023 and projected an underfunding of $506 million for fiscal 2026. He noted planned changes to cross‑subsidy aid that are scheduled to increase the state’s share from 44 percent to 50 percent, but he cautioned the board that a Blue Ribbon Commission on Special Education is charged with identifying $250 million in adjustments during the next biennium and that if the commission does not reach its target, the scheduled increase could be reduced to make up any shortfall.

Blackburn reviewed levy mechanics and timing: some levies are voter approved while others are board decisions, and the state’s formulas create an aid/levy equalization in many categories so raising levy authority does not always yield more total district revenue. He explained the relationship between market value changes and taxpayer shares of a fixed levy amount, and he said the county collects property taxes and distributes them to taxing jurisdictions.

Next steps: Blackburn said the district will receive preliminary levy reports from MDE in the coming week, will review them with its financial adviser (Ehlers & Associates) and will present a recommended preliminary levy to the board for approval at the Sept. 18 meeting. He said the board may set preliminary levies to the maximum authorized level to preserve the district’s authority while final state reports and market changes are confirmed.

Board members asked technical questions about timing, collections and levy categories (for example, asking whether QComp is a levy line item and how tax notice timing aligns with district and county accounting). Blackburn answered and said staff will provide additional detail in upcoming workshops. The board did not take a levy vote on Sept. 4; Blackburn said the levy workshop is set for Sept. 9 and the board will act on a preliminary levy request on Sept. 18.