Duluth Public School District proposes 6.9% levy increase for taxes payable 2026

Duluth Public School District officials presented a proposed 6.9% increase to the district levy for taxes payable in 2026 at a Dec. 16 Truth in Taxation hearing. Simone Zunich, executive director of finance and business services, told attendees the levy is calculated in 2025 and collected in 2026, with revenue applied to the 2026–27 school year.

Zunich laid out how levy revenue would be allocated under the proposal: roughly 40.6% of the levy would fund district regular and special education instructional programs and associated services, about 1.5% would support the Community Education Fund (including early childhood and after-school programming), and approximately 57.9% would go to debt-service repayment. She also described the district’s broader revenue mix: state aid represents the largest share (about 62.26%), federal funds roughly 6.93%, and the local levy about 23.28% of the revenue pie presented on the slides.

“This is our annual truth in taxation meeting,” Zunich said in opening remarks. She emphasized that salaries and benefits account for most spending, noting, “Our salaries and benefits are close to 85% of our budget.” Zunich also walked through program-level spending, saying regular instruction is about 42.95% of general fund program expenditures and special education about 21.41%.

Board members and staff discussed recent ballot history and how past votes affect current finances. Zunich reviewed two recent ballot outcomes: a May 14, 2024 capital projects levy question that would have raised an estimated $5.29 million failed, and a Nov. 7, 2023 bond refunding and capital projects question that passed (the refunding was described as expected to generate about $2.6 million in annual savings). She reminded listeners that the district’s 2018 operating referendum authority runs through taxes payable 2028 and produced $5,708,350.92 for taxes payable 2025.

Board members pressed staff on enrollment and timing. Zunich said the district estimated an increase in average daily membership (ADM) of about 75 students for its projections, but cautioned that the district “does not see the funding for almost 2 years on any based enrollment,” meaning revenue is recognized based on counts from roughly a year-and-a-half to two years earlier. Members described the practical and planning challenges that lag creates for addressing immediate needs.

The presentation also highlighted growth in miscellaneous local revenue—primarily grants. Member Mike Stelt observed that the district’s miscellaneous local revenue rose from about $4.8 million last year to roughly $8.3 million this year; Zunich confirmed the increase, citing MTSS and other grant awards and describing a district grant-approval process that routes grants through a committee and the board.

Zunich gave three illustrative examples showing how different market-value changes would affect a $304,000 home’s annual school-tax bill, with sample increases ranging from under $10 to around $78 per year depending on the percentage change modeled. She cautioned that the exact dollar changes shown on slides derive from the presented scenarios and referred the public to Minnesota Department of Education certification reports for official levy calculations.

On state-driven costs and mandates, Zunich listed items that could change district liabilities, including long-term facility maintenance (LTFM), the Read Act phases, and Minnesota paid family leave/safe and sick time, some of which have unclear funding paths. When a board member raised that school board members may be counted as employees for earned safe and sick-time calculations, Zunich said she would research that issue further.

There were no public comments at the hearing. With no further questions, Zunich closed the Truth in Taxation hearing and said she would follow up on specific parcel questions submitted by email and on open items raised by board members.

Next steps: Zunich referenced supporting materials on the Minnesota Department of Education website and offered to provide additional clarifications before the next school board meeting.