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Lake of the Woods board to ask voters for separate capital projects levy and $4 million bond as district faces six-figure deficit
Summary
The Lake of the Woods School Board voted to place two separate questions on the ballot — a 10-year $400,000 capital projects levy and a $4 million building bond — after administrators described an $856,000 annual budget gap and a decade-long facility backlog.
Jeff Nelson, superintendent, told the board the district faces “a critical financial situation with an annual deficit estimate of $856,000,” based on FY23 audit figures. He said slow enrollment decline (31 fewer students since 2019) and a state per-pupil allowance that has not kept pace with inflation are the main drivers of the shortfall.
Nelson recommended asking voters two separate questions in a special election: a 10-year Capital Projects Levy (CPL) of $400,000 and a $4 million building bond. The administration argued separating the questions prevents one item from being contingent on the other and allows one to pass while the other fails.
The superintendent and staff presented estimated tax impacts for a home with $185,000 market value: the district—s current school property tax payable is described in the materials as about $535 per year; the proposed CPL would add roughly $78 per year and the building bond roughly $41 per year, producing a combined total near $654 per year in the example presented to the board. Nelson said the district would post a property-tax impact calculator on its website so residents can estimate their own tax change.
Board materials and the superintendent—s presentation tied the district—s structural gap to two concrete items: (1) state funding that lags inflation (the presentation cited a 2024—25 per-pupil allowance of $7,281 that would need to be about $8,637 to match inflationary pressure since 2003), and (2) an estimated $450,000 cumulative revenue loss from declining enrollment over the prior five years. In addition, administrators summarized about $920,000 in previously implemented cuts and said additional reductions would likely affect core programs and class sizes.
The board approved a resolution to call the referendums and directed staff to proceed with public communications, including posting the tax-impact calculator and informational materials. The administration said any items not explicitly allowed under the CPL language would require Minnesota Department of Education (MDE) approval.
Next steps: the board will publish the final ballot language, schedule outreach and information events, and provide the public with the tax-impact tool before the election.
