Key Points
- The Ely School District is requesting that the voters pass a referendum during next week’s election.
- The vote will allow the school district to gain $325,000 more annually.
- There would be no increase in taxes for the Ely community or cabins since the district has promised to lower the tax levy if the voters pass the referendum.
- The current referendum will be overturned and replaced with a new 10-year referendum.
- Passing of the referendum will increase the per pupil cost of education from approximately $350 to $1,775.
- The money will come through Minnesota’s Seasonal Recreation Tax Base Replacement Aid, which was enacted by the 2026 legislation.
- This aid is meant to benefit 75 Minnesota school districts, where cabins make up more than 35 percent of their tax base.
- According to Superintendent Anne Oelke, passing the referendum will allow the district some relief from cutbacks and reductions.
- If the vote does not pass, the district will most probably attempt to pass it through a special election.
Ely (Wales Times) October 29, 2026 – The uk/local/cardiff/ely/">Ely School District is asking voters to approve a referendum in next week’s election that would open access to new state aid and provide the district with an additional $325,000 annually, according to Northern News Now.
The referendum would technically increase property taxes, but the district says Ely residents would not fund that increase. Instead, the proposal is linked to a new Minnesota law that redirects a portion of taxes paid on seasonal recreational properties, commonly known as cabins, back to eligible local school districts.
As reported by Northern News Now, the measure would require the district to revoke its current operating referendum and approve a new one. If passed, the new referendum would run for 10 years and increase per-pupil funding from approximately $350 to $1,775.
Superintendent Anne Oelke said the additional revenue would allow the district to pause the cycle of budget reductions it has faced in recent years.
“If this were to pass, then we would probably have a little bit of a reprieve where we’re not doing reductions and we’re not looking at cutting programmes for students,” Oelke said, as quoted by Northern News Now.
Why Does Ely Need Additional Funding?
The district is facing financial pressure similar to that experienced by other rural Minnesota school systems. Northern News Now reported that Ely moved to a four-day school week this autumn as one measure to reduce costs.
Oelke told the outlet that the district has experienced years of deficit spending. The proposed referendum, she said, would provide a needed break from continued cuts.
The additional $325,000 per year would come through a combination of the revised local referendum and state support made available under the Seasonal Recreation Tax Base Replacement Aid programme.
The district has committed to “under levying” if voters approve the measure, meaning it would reduce its local property-tax levy by an amount intended to offset the technical tax increase created by the new referendum.
“This would really help our district and I know it’s confusing, but it will not increase taxes because we will under levy,” Oelke said, according to Northern News Now. “This would bring in $325,000 more revenue than our current operating referendum and our levy does.”
How Would the New State Law Work?
Under Minnesota law, owners of seasonal recreational properties do not pay school operating referendum levies. Instead, they pay an additional state tax that goes into the state’s general fund.
The new law, passed during the 2026 legislative session, redirects a portion of those cabin property taxes back to local school districts that qualify for the aid.
DFL state Sen. Grant Hauschild and Republican state senators from the Iron Range authored the legislation. Hauschild said the change was intended to address what he described as an imbalance in how cabin-heavy districts are funded.
“It’s just not fair that we have properties in our school districts that are not paying their fair share,” Hauschild said, as reported by Northern News Now.
He added that the law does not change anyone’s taxes because the money had previously been directed to the state general fund.
“It doesn’t change anybody’s taxes because those taxes were already just going to the general fund. This just shifts it so that we provide an aid back to the school districts,” Hauschild said, according to Northern News Now.
Which Districts Qualify for the Aid?
Ely is one of 75 Minnesota school districts eligible for the Seasonal Recreation Tax Base Replacement Aid.
To qualify, at least 15% of a district’s tax base must consist of seasonal recreational properties. In Ely, cabins make up more than 35% of the district’s tax base, according to Northern News Now.
That high proportion of seasonal property is central to the district’s funding challenge. While cabins contribute to the local tax base, their owners do not pay the local school operating referendum levies that support districts such as Ely.
The new state aid is designed to replace part of that missing local revenue. However, districts must first put the necessary referendum structure in place to access it.
For Ely, that means revoking the current referendum and asking voters to approve a replacement measure that qualifies the district for the state support.
What Happens If Voters Approve the Referendum?
If approved, the referendum would provide the district with an additional $325,000 per year for 10 years.
The district says residents and cabin owners would not experience a tax increase because the school board has committed to reducing its levy if the measure passes.
The additional funding would raise per-pupil funding from roughly $350 to $1,775, according to Northern News Now.
Oelke said the revenue would reduce the need for further reductions and could help protect student programmes. The district has already moved to a four-day school week this autumn in an effort to control costs.
The referendum would not immediately resolve every financial issue facing the district, but it would provide a new annual revenue stream supported by state aid rather than by an increase in local taxpayers’ bills.
What Happens If the Referendum Fails?
If voters reject the measure, Oelke said the district would attempt to bring the question back to voters. That effort would likely require a special election, according to Northern News Now.
Until then, the district would continue operating under its current referendum and levy structure. The existing arrangement provides approximately $350 per pupil, compared with the $1,775 per pupil that would be available under the proposed replacement referendum.
The district has not said what specific reductions would follow if the measure fails. However, Oelke’s comments indicate that the administration views the referendum as a way to avoid further programme cuts and staffing reductions.
Background of the Development
Ely School District, like many rural districts in Minnesota, has faced ongoing budget pressures. The district moved to a four-day school week this autumn to help reduce expenses, according to Northern News Now.
Minnesota’s school funding system has historically treated seasonal recreational properties differently from other taxable property. Cabin owners do not pay local school operating referendum levies; instead, they pay an additional state tax that enters the state’s general fund.
That structure has created a funding gap in districts where cabins represent a large share of the tax base. Ely is one such district, with cabins accounting for more than 35% of its tax base.
In response, DFL state Sen. Grant Hauschild and Republican state senators from the Iron Range authored legislation during the 2026 legislative session to redirect a portion of cabin property taxes back to qualifying school districts. The measure created the Seasonal Recreation Tax Base Replacement Aid programme.
Ely is among 75 Minnesota districts that meet the programme’s eligibility threshold, which requires seasonal recreational properties to make up at least 15% of a district’s tax base.
To access the aid, Ely must revoke its current referendum and secure voter approval for a new 10-year referendum. The proposed measure would increase the district’s per-pupil funding from roughly $350 to $1,775 while the district reduces its local levy to prevent a net tax increase for residents and cabin owners.
Prediction: How Could This Affect Ely Voters and Families?
If voters approve the referendum, Ely families could see the district gain an additional $325,000 each year for a decade. That funding could reduce the likelihood of further programme reductions, although the available reporting does not specify which programmes or services would be protected.
For local taxpayers, the immediate financial effect is expected to be neutral. The district has committed to cutting its levy if the referendum passes, meaning residents and cabin owners would not pay more because of the measure, according to Northern News Now.
For the wider community, approval could stabilise school operations after the district’s move to a four-day school week. The additional state-supported revenue may give administrators more flexibility in future budget planning, particularly if deficit spending continues to pressure the district.
If the referendum is rejected, the district would likely return to voters through a special election. In that scenario, Ely would remain eligible for the state aid programme but would not receive the additional funding until it successfully approves a qualifying referendum.
