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Senate file 22‑44 aims to increase referendum levy equalization; first‑year cost estimated by staff
Summary
Senate file 22‑44 would raise the referendum levy equalization factor to increase state aid for property‑poor districts and reduce homeowner tax burdens; committee testimony included district examples and staff provided a preliminary statewide fiscal estimate of about $120 million first‑year appropriation.
Senate file 22‑44 would increase the state equalization factors used to calculate aid for voter‑approved operating referendums, directing more state aid to property‑poor districts so they do not rely as heavily on local property taxes.
Sponsor Senator Kupik said the measure addresses regressive property tax effects and inequities that penalize homeowners in property‑poor districts. Testimony from multiple superintendents described districts that are effectively "property poor" and cited large per‑home tax burdens for the same referendum ask compared with wealthier districts. Fridley superintendent Brenda Lewis said Fridley households pay roughly $44 annually on a $350,000 home and that increasing equalization would lessen future tax increases while helping sustain programs such as academic interventions and mental health services.
Saint Michael‑Albertville business official Chris Crocker described prior staff reductions and a significant near‑term deficit, arguing that increased equalization would make future operating levies more feasible and reduce pressure on local taxpayers. Owatonna superintendent Jeff Elstad outlined statistics showing the erosion of equalization since 1997 and said his district's homeowners pay substantially more for the same referendum amount than homeowners in wealthier communities.
Committee staff indicated that a district‑level run in the meeting packet modeled fiscal year 2027 changes; the staff estimate presented in committee discussion put the state total general education entitlement change at approximately $134.6 million for fiscal 2027, which the staff characterized as roughly a $120 million first‑year appropriation amount when modeled as an appropriation.
Committee action: Senators praised the proposal and asked staff for further modeling. The bill was laid over for possible inclusion in a future omnibus bill; no floor vote occurred in committee.
Ending: Supporters framed SF 22‑44 as an equity measure to make school funding less dependent on local property wealth; staff and authors acknowledged a meaningful first‑year fiscal cost that will require budget negotiations.
