Ask Mr. (School) Answer Person: Questions about taxes after the North Winneshiek and Decorah school district consolidation

Dear Mr. (School) Answer Person:  A reader asks us: "My understanding is that the North Winneshiek School District has no existing debt , they levied taxes & paid as they went. The Decorah District has considerable debt --- will North Winn taxpayers now have to help pay off  Decorah's existing debt? North Winn school taxes have been considerably less than Decorah School taxes. How much increase can the  North Winn  people expect?"

Mr. (School) Answer Person says: "There was a recent movie titled "It's Complicated." That is also our answer.  We don't have a simple answer to a complex question.  North Winneshiek is debt free and Decorah does have bond debt payments through 2026.  

In a consolidation, the state of Iowa gives the consolidating district's property tax incentives to combine.   If there was not a consolidation, there would be no property tax incentives for both districts.  Now, we have them.

The School District Aid and Levy Spreadsheet used to determine property taxes is 16 pages long.  

The final tax rate depends on several factors. School districts use the valuation of the taxable land, how many students the district will have and what the state's regular financial contributions to the new school district will be.

Also, both schools have income surtaxes which help with the Instructional Support Levy and the Physical Plant and Equipment Levy.

North Winneshiek's income surtax is slightly higher than Decorah's income surtaxes and Decorah's property taxes have been higher than North Winneshiek's.  

The final tax amount won't be known until several factors are determined and we won't know that until the spring of 2019 when the new consolidated school system goes through its first budget cycle. These factors are: 1) What is the certified enrollment? 2) How much is the new valuation for the consolidated district? 3) What is the state's contribution to the regular program district cost?

The assumption is, that the new tax rate will be somewhere between North Winn's tax rate and Decorah tax rate.  Some people might see a decrease in their income surtaxes also.  So, with all that being said, the following are guaranteed tax incentives through 2026.  

Both school boards felt it was best to project out to 2026 with tax incentives in order to make this a smooth transition.

Property Tax Incentives for Reorganization:

School Year
2019-2020 $1.00 State Buydown Incentive = Base Tax Rate $4.40
2020-2021 $.50 State Buydown Incentive = Base Tax Rate $4.90
2021-2022 $.25 State Buydown Incentive = Base Tax Rate $5.15
2022-2023 Property Tax Relief $270,000 from State Sales Tax per Revenue Purpose Statement
2023-2024 Property Tax Relief $270,000 from State Sales Tax per Revenue Purpose Statement
2024-2025 Property Tax Relief $270,000 from State Sales Tax per Revenue Purpose Statement
2025-2026 Decorah Bond Debt is paid in full.

decorahnews.com expresses appreciation to North Winneshiek School Superintendent Tim Dugger for providing the above summary.