Levy Fairness – Seasonal Recreation Tax Base Replacement Aid
In this post 2001 era of different tax rates across Minnesota’s school districts for students’ educational funding, MREA is committed to Levy Fairness. While the immediate beneficiaries of Levy Fairness are the property taxpayers in our communities, the ultimate beneficiaries are our students and their futures.
A glaring example of levy unfairness is that 86 of the 89 school districts without a voter-approved Operating Referendum are in rural Minnesota. You will also notice in this map that 66% of these zero-referendum rural districts are in Central and Northeast Minnesota.
View the interactive map.
“With state funding for education failing to keep up with inflation over the last 20 years, operating levies are used to simply pay the bills, for basic staffing, support services, and supplies. This is at a time when schools are being asked to do more for students and families,” stated John Ward, former state legislator.
The median school district with a voter-approved operating referendum has an $844 advantage per pupil over the 89 districts with zero operating referendum. That can pay a lot of bills and help maintain lower class sizes.
What is a possible cause of this in Central and Northeast Minnesota?
Lakes – many with cabins and homes – that are not occupied year-round. These are ‘Seasonal Rec’ properties. In 2001 they were removed from school district tax rolls and added to a statewide general levy, now generating $40 million in property tax state revenue. The result is zero local school district operating tax revenue and the revenue from an Operating Referendum is paid by fewer taxpayers. Losing the seasonal and recreational property tax base makes the cost per taxpayer in those districts much higher.
To create more levy fairness to benefit students and taxpayers in Minnesota’s lakes country, MREA supports the creation of a tax base replacement aid. This bill (HF 1161/SF 1197 Rep. Spencer Igo and Sen. Grant Hauschild) does not change how “cabins” are taxed. Instead, the state will send funding back to the school district if they have a voter-approved Operating Referendum. The school district then uses this aid to reduce the total cost of the levy, which is distributed across the RMV properties by the county auditor.
You can see in this map, districts with the largest percentages of seasonal rec replacement aid and resulting levy reduction for voter-approved operating referendums are in the same locations as the nearly 60 districts with zero voter approved referendums: Central and Northeast Minnesota.
View the interactive map.
To qualify for this aid, districts must have a voter-approved operating referendum and 10% or more of their combined Referendum Market Value and Seasonal Rec tax valuation in Seasonal Rec. The maximum percent levy reduction is 50%.
The proposed program will hopefully help improve the local conversation about passing an Operating Referendum, especially in districts with a high number of seasonal/recreational properties. It is intended to level the playing field for these local property owners by restoring district property tax collections lost to the state since 2001.
All students in Minnesota deserve fair and equitable funding, and the disparities in school levy programs must be addressed. Our children are our future. The education we provide for them in every corner of the state is the best investment we can make. It will take all of us to make sure this bill comes to fruition.
What can you do?
Contact your State Representative and Senator. Ask them to become a co-author on HF 1161 and SF1197. Ask them to also advocate for the passage of this bill. You can also spread the word about the bill. Ask others to also get engaged in helping get this much needed bill passed.
This is one part of MREA’s proposals to bring better levy fairness for taxpayers and more equitable funding for our students. Watch for future Insider Brief posts on Levy Fairness and student funding equity included in MREA’s 2026 Platform.