ISD 709 officials present payable‑2025 levy plan; school portion of property tax falls 2.86%

Simone Zunich, the district’s chief financial officer and business manager, told a June 19 truth‑in‑taxation hearing that the Duluth Public Schools (Independent School District 709) levy for payable 2025 will be lower than the previous year. “The school district levy is actually going down this year, by 2.86%,” Zunich said, citing a reduction she gave as $1,323,441.87.

The hearing, presented under Minnesota Statute 275.065, reviewed the district’s proposed levies for the 2024–25 school fiscal year, how district revenues are composed and how those revenues are spent. Zunich said the district’s revenue mix is heavily weighted to state aid (about 60.84%), with federal aid at 7.48% and property tax levies accounting for roughly 25.79% of revenue. The district showed levy distribution by fund as approximately 38.2% to the general fund, 1.7% to the community education fund and 60.2% to debt service.

Zunich reviewed recent referendum and bond action. She said a May 14 capital projects (sometimes called a “tech” or capital levy) referendum did not pass (47.84% yes, 52.16% no) and that a separate November referendum included a successful bond refunding that she said saved the district about $2.6 million annually; the capital projects question on that November ballot did not pass (49.5% yes, 50.5% no). Zunich also described a restructuring of voter‑approved debt service that postponed a payment originally scheduled for spring 2025 and shifts payments into later years.

Board members and residents asked for clarifications. Board Member Loefflercamp asked which pupil count the state formula uses; Zunich said the district’s basic formula is calculated using adjusted pupil units (APU) — she cited the district’s APU figure shown in the packet (8,998.86) multiplied by the state basic formula allowance. Board Member Mike Sell noted a near $10 million increase in salaries and benefits compared with the prior year; Zunich attributed the change primarily to contract settlements and step/lane movement for staff and noted that one‑time federal ESSER spending in prior years had reduced supplies and equipment spending, which has now declined.

Members questioned the district’s debt share. A community member asked why about 60% of the district’s levy appears to go to debt service; Zunich said the district’s ideal split between general fund and debt service is closer to 50/50 but that recent long‑term facility maintenance bonds and other restructuring have increased the debt portion. She offered to provide comparative data with nearby districts upon request.

Zunich also reviewed program‑level budget details in the packet: roughly 75% of revenue ties to the general fund, and about 76% of general fund expenditures are salaries and benefits. The packet highlighted that roughly 86% of total expenditures are staff salaries and benefits, a point Superintendent Magus reiterated when thanking Zunich for her presentation.

Other clarifying details Zunich provided included: the district levies a school‑age care levy (up to $90,000), but two years of expenditure coding showed much smaller outlays (about $24,000 for the most recent complete year), so state adjustments are often required; some lease levy adjustments reflected a shortened lease (UHG) that resulted in a reduced levy for the year in question; and market values used to compute taxable values were finalized at county review and are subject to statutory limited‑value exclusions and the Department of Revenue data used for illustrative homeowner examples.

The hearing closed with an itemized resolution included in the board packet that “proposes the following tax levies for general purposes” under Minnesota law; no formal vote on that resolution was recorded during the hearing. Board members and residents were invited to submit property‑specific questions to Zunich by email.

Why it matters: the district’s levy and revenue choices affect local taxpayers and the school budget for instructional programs, transportation, building maintenance and debt service. Board discussion emphasized that most district spending is for staff salaries and benefits and that state formulas and voter referendums influence the district’s available revenue and long‑term fiscal plans.

The district provided packet pages and pie charts and discussed enrollment history, tax base composition (residential homestead about 46.41%, commercial/industrial about 24.19%, residential non‑homestead about 24%), and scenarios showing how taxes on a median Duluth home (presented as $285,008.53 in Department of Revenue data used in the packet) would change under different valuation outcomes. The district said final taxable market values were set at local county board of review/board of equalization hearings and that market value exclusions under new state statute language were provided in the packet for readers to review.

No formal levy adoption vote took place at the hearing; the board packet included a resolution proposing the payable‑2025 levies for consideration.