School district tax levy will increase 4.39% in 2025

Eden Prairie homeowners will see school property tax increases ranging from $30 to $132 in 2025, depending on their home’s value.

The school board unanimously approved the 4.39% tax levy increase on Dec. 9, citing the need to offset rising costs and lagging state funding. The final levy amount of $63.02 million for fiscal year 2025 is an increase of $2.65 million over the 2024 levy of $60.38 million.

The board finalized the levy at its annual Truth in Taxation hearing. Andrew Adams, executive director of business administration for Eden Prairie Schools, explained in detail how the levy was calculated. Although there was an opportunity for public comment, nobody offered any.

Eden Prairie has maintained a strong financial situation, while many other districts in surrounding areas are planning or already implementing cuts to staff and services.

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While the Eden Prairie community has traditionally shown robust support for the school district, the board must regularly assess the district’s financial needs and tax increases the community is willing to bear.

Adams said the levy amount is necessary to ensure programs and services remain fully funded.

In a statement to the superintendent and School Board, he said, “The final proposed property tax levy is critical in offsetting rising operation costs and supports in light of lagging state funding.

“These dollars also help ensure the fiscal stability of the district as a part of promises made to stakeholders during the 2022 operating referendum.”

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Adams said the estimated annual tax increase would be about $80 for a home valued at $545,000, about the median value of an Eden Prairie home, assuming no change in home market value from 2024 to 2025. This would result in a total school tax bill of $2,313. Adams estimated that the increase on a home valued at $850,000 would be $132, for a total of $3,752. The increase on a home valued at $350,000 would be about $30 a year, or $1,439.

About school district funding calculations

Adams explained that school district funding is highly regulated by the state. He added that it involves many factors and requires many complicated calculations.

The state formulas that determine revenue are primarily based on specified amounts per pupil. There is also a maximum authorized property tax levy – districts can levy less but not more than the amount authorized by the state unless approved by voters. The state also authorizes the school board to submit referendums for operating and capital needs to voters.

Although state funding makes up most of the district’s budget, it falls significantly short of covering Eden Prairie Schools’ full costs. Since fiscal year 2003 (FY03), the state funding formula has not kept pace with inflation. For FY25, the Legislature approved an increase of 2%, but the per-pupil allowance for FY25 of $7,281 would have needed to increase by another $1,364 (18.7%) to keep pace with inflation since FY03.

This is why there is ongoing dependence on money provided by referendums: to bridge the gap between state funding and what district officials feel they need to spend, Adams said. The district needs to raise more money to afford educational programs, infrastructure maintenance and staff salaries and benefits.

Learn more about how school taxes are calculated by watching the Truth in Taxation hearing and viewing Adams’ presentation on the school district’s website.