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ND lawmakers build on school funding shift

GRAND FORKS -- North Dakota's government will begin picking up a larger percentage of the local education tabs starting Aug. 1.

That's because a new funding formula for K-12 education was passed by the Legislature at the close of session May 4 -- resulting in $656 million in property tax relief for residents.

"The formula diminishes reliance on property taxes for schools and at the same time does not halt the growth and valuation of the district," said Rep. Mark Sanford, R-Grand Forks, one of the sponsors of House Bill 1013.

Under the new formula included in the bill, $8,810 per student will be provided to school districts in its first year and $9,010 the second year. Local schools will chip in with their local funds raised through property taxes and other means.

The current formula has the state giving each district an equal share of aid no matter how much in property taxes it levied.

The bill also included a buy down that decreased the districts' mill levy cap to 60 mills, part of an ongoing mill reduction effort by the Legislature. Five years ago, the average school district mill levy was 195 mills.

Sanford said the Legislature anticipated some bumps and transition costs when adjusting to the lower mill cap. Districts are allowed to raise their levies a maximum of 10 mills for instructional funding and 12 mills for non-instructional funding without requiring a public vote on the increases.

Senate Appropriations Chairman Ray Holmberg, R-Grand Forks, said the law limits school districts from raising mill levels to ensure homeowners do get property tax relief.

Districts will only be allowed to raise their income 12 percent each year. The increase includes increases in property values in the district that would lead to higher income even if the tax rates stayed the same.

Regardless of how the Legislature pursues property tax relief, voters will want it to continue, Holmberg said.

"I think it's here to stay because voters told us they want this," he said. "We're in a very good position to continue it well into the future."

Reporter Christopher Bjorke contributed to this report.