By Jolene FarleyVoters in the Hills-Beaver Creek school district will decide in November on a proposal for a 10-year operating levy referendum.The H-BC School Board passed a resolution at a special meeting Tuesday allowing voters to decide whether to eliminate the current $229 per pupil unit levy and replace it with a $855 per student unit levy beginning with property taxes payable in 2005. After equalization, taxpayers would pick up 46.53 percent or $92,993 per year of the increase, while the state would pay for 53.47 percent or $106,882 per year. Agricultural property will pay taxes for the proposed referendum based on the value of the house, garage and one acre. Seasonal recreational residential property will pay no taxes for the proposed referendum.The current $229 per pupil levy, which expires next year, generates about $79,622 in income for the district. Current cash flow levels aren’t enough to keep the district running, according to Superintendent Dave Deragisch."We struggle every month to pay the bills from one month to the next," he said. Sometimes bills approved by the board cannot be paid until another aid payment arrives from the state, Deragisch said. "I’ve been telling teachers for the last year and a half that we are broke," he said. "I just want you to know that we don’t have money sitting in the bank somewhere."Before the board voted on three referendum levels, Deragisch gave the board some background on when cash flow issues began for the district. Four years ago, the district had a $1 million levy. When the state of Minnesota implemented tax reforms four years ago, the district lost more than $700,000 in revenue. Since the tax reforms, the state of Minnesota hasn’t replaced the missing revenue. The district was fortunate that it had a healthy general fund balance when the tax reforms were implemented, Deragisch said. After spending down the general fund balance, the district made more than $100,000 in budget cuts earlier this year in an attempt not to raise the levy.Deragisch and board member Gary Esselink stressed that many other districts have already asked voters to increase their operating levy in previous years and are back at the polls again this year. "We did not go for a referendum four years ago when a number of schools did," Deragisch said.The board was presented with three options before voting. Canceling the current $229 levy and passing a $500 per pupil unit levy would generate $173,295 for the district each year.Setting the levy at $700 per pupil unit would generate $242,613 for the district. The $855 levy, if passed, would generate $296,608 extra per year in revenue for the district. "I’ll be blunt with you, $500 isn’t enough," Deragisch said. Finance committee chairperson Gary Esselink recommended that the board approve the resolution for $855 per student unit for the ten-year term."It’s tough," he said. "It’s never easy to raise taxes."Another round of budget cuts would be devastating for the district. "It’s pretty hard to cut what we’ve got …" he said. The referendum was originally on the agenda for the regular school board meeting next Monday, but a special meeting was called when Deragisch discovered state law changed the deadline from 49 to 53 days before an election.Deragisch pointed out that counties, cities and townships have also been forced to cut their budgets and increase taxes but those entities aren’t required to put tax increases on the ballot."Our obligation is, we have to go before the voters," Deragisch said.