Ellsworth School District residents are again being asked for money to keep the doors of their school open.
At an Oct. 15 public meeting, they learned about a proposed 10-year $1,779.50 per pupil operating levy.
“We’re out of gas,” Superintendent John Willey said about the reason for the referendum. “The state of Minnesota hasn’t kept up with funding to schools at the level that is needed to cover expenses.”
If voters approve the referendum, the district would garner an additional $97,000 per year, which is the maximum amount the state will allow Ellsworth to ask for.
But it’s not enough to satisfy a hole in the budget.
Ellsworth’s 2018 revenues were $1,906,775 and expenditures were $2,096,375, resulting in a shortfall of $189,600. The simple math wasn’t lost on residents at the meeting.
Even with the additional $97,000 in new referendum funds, expenses would still exceed revenue by $92,600, which means Ellsworth’s dwindling reserves would need to cover the gap.
“It will help us for a couple years, and then we’ll probably have to come back and do this again,” Willey said.
Over the past 10 years, reserves have shrunk in half, from $974,679 in 2008 to $456,057 in 2018.
Fewer students, fewer dollars and other comparisons
of a small district
In that same time period, Ellsworth’s K-12 enrollment shrunk from 191 students in 2008 to 145 in 2018, with leaner years in between.
“That’s the real story, because that’s where the real money comes from,” Willey said, referring to state per pupil funding.
Willey said school districts have only three ways to bring in money — state aid, student enrollment and taxes — none of which have been lucrative for Ellsworth in recent years.
He points to a graph that compares Ellsworth’s tax data to neighboring school districts.
Its attendance area covers only 81 square miles, compared with 117 for Hills-Beaver Creek, 176 for Adrian, 263 for Worthington and 264 for Luverne.
The same graph compared average home values for property tax purposes.
The average home in the Ellsworth district is valued at $46,230. Adrian’s average home is valued at $88,286, in H-BC’s district it’s $88,952, Luverne’s is $94,562 and Worthington’s average home value is $115,000.
Average household income in the Ellsworth district ($47,431) compares similarly using 2017 figures. Worthington district’s average household income is $52,367, Luverne’s is $54,918, Adrian’s is $58,929 and H-BC’s is $60,573.
‘Either way my taxes go up’
It’s not an option for the near the future, but the reality of Ellsworth’s diminishing bottom line may be to one day join a neighboring district.
However, some residents at the Oct. 15 meeting said they’d pay higher taxes in a nearby district than they pay now.
“I would challenge anyone here to look at what your taxes are on your land and what they’d be in a neighboring district,” said Clayton Schilling.
It seemed for many in attendance that the question wasn’t whether or not they’d support it; the question was how much it would cost them and how long it would be until the next request came for more money.
If the proposed referendum passes this fall, taxes on an average $100,000 home in the district will increase roughly $255.
Willey encouraged residents to use the tax calculator on the district’s website to estimate tax impact on each resident’s property, based on 2020 values.
“The tax impact is based on your referendum market value, not assessed value, and there’s a big difference between the two,” he said.
“That’s why we use this calculator so people can use their own data.”
Chad Dressen said he’d rather have his taxes go up to support Ellsworth’s referendum than to pay higher taxes toward a different school.
“Our taxes are going to go up no matter what,” he said. “Vote no, and pay higher taxes in another district, or vote yes and pay higher taxes in Ellsworth.”
Running a tight ship
Greg Baufield of Northland Public Finance, Minneapolis, assisted with the Oct. 15 public meeting and pointed out that overspending isn’t Ellsworth’s problem.
“Your board is doing a great job,” Baufield said. “You’re running a tight ship. There’s just not a lot you can do.”
Willey said trimming the budget any further would mean combining grades, cutting programs, reducing the superintendent to half-time employment.
After the current fall sports season, Ellsworth will pair with neighboring districts in all its sports programs, starting Nov. 1, and it has already cut many of its fine arts programs.
Difference between operating referendum and capital referendum
Willey explained that the new operating referendum dollars would support daily operations of the school and paying staff. It raises revenue through taxes on all property owners, including the house, garage and one acre.
It’s different from a capital referendum, which funds building projects, repairs and equipment purchases. Capital referendums raise revenue through taxing all property — homes and land — using bonds
The Ellsworth district is one of the few in the state that hasn’t requested a capital referendum since the early 1970s, and its residents are proud of that.
“We shouldn’t underestimate ourselves. Take a look around this gym,” said Clayton Schilling. “Everything was donated, the new floor, the mats … It’s like a church; when we need something we take an offering and it’s paid for.”
Willey said it’s clear the Ellsworth district residents love their school and are willing to support it, but he said there are some looming expenses, such as a 50-year-old boiler and an aging roof that may soon need attention.
Pattern of referendums
The Oct. 15 discussion wasn’t new to most of the 60-some people gathered on the gym bleachers.
This is the third time in 10 years they’ve been asked to help cover an ever-widening shortfall in the district’s operating budget.
The proposed referendum (effective in 2020 if it passes) would replace a 10-year $1,121 per pupil referendum passed in 2013. The 2013 referendum replaced the one passed in 2010.
Wally Schultz, 82, said the tax impact of the new referendum will cost him more than $100. He will continue to support operating referendums, even though his children graduated long ago.
“I think it’s important to keep the school open,” he said. “I think it’s important to keep Main Street open.”
And even though the new referendum isn’t a long-term fix, Baufield said the Ellsworth School Board didn’t have many options but to put it on the ballot.
“You do have some facilities challenges,” he said. “But right now we need to pass this operating referendum, and then we’ll go on to Plan B, C or D.”
The measure needs only a simple majority — 50 percent plus 1 — to pass. Ellsworth residents supported the 2013 referendum 70-30.
“You have now become informed citizens,” Willey told the Oct. 15 gathering. “Now it’s your job to inform your neighbors.”
The special election is from 5 to 8 p.m. Tuesday, Nov. 5, at precinct polling places around the district. See the school website, ellsworth.mntm.org.
Voters can cast ballots early by contacting the Nobles County Auditor, 507-295-5258 or by downloading a form at co.nobles.mn.us/departments/auditor-treasurer/elections.