Table of Contents
Howie's column is powered by Lyric Kitchen · Bar
It always begins with something small. A resolution on a Tuesday night. A vote that sounds procedural. A quote about “keeping up our buildings.”
Then, weeks later, taxpayers learn they’ve inherited another $38 million in debt.
The Duluth school board has authorized the sale of general-obligation bonds under Minnesota’s long-term facilities-maintenance program. On paper, it’s about roofs, electrical, boilers and plumbing. In practice, it’s a way to borrow tens of millions without ever asking voters’ permission.
They’ll tell you this is normal. They’ll call it routine, even boring. But the real story lives inside the fine print: repayment doesn’t start until 2029.
Interest pushes the total to more than $50 million. And the entire cost — every dime of principal and interest — will be carried on local property-tax bills.
If that feels familiar, it should. This is the same financial DNA that fueled the Red Plan, the last time Duluth trusted a small circle of insiders to decide how much debt the city could absorb.
School administrators describe the process as “annual maintenance,” which is technically true and strategically cunning. Calling it maintenance turns extraordinary borrowing into routine business.
It also slides under the state statute that requires voter referenda for most construction bonds.
Under Minnesota law, long-term facilities-maintenance bonds don’t need an election as long as the district files its 10-year plan with the Department of Education and shows the debt service fits within projected revenue.
So the district submits a spreadsheet, gets a bureaucratic blessing and proceeds to market the bonds.
Legal? Absolutely. Transparent? Not remotely.
What the public rarely sees is the arithmetic. The district already carries more than $125 million in debt. Add this issue and total obligations creep toward $160 million — roughly the size of the district’s entire annual operating budget.
Debt service already consumes about 60 percent of the school levy.
With this addition, Duluth is entering a decade in which the school system will spend more paying off past repairs than teaching future students.
The repayment schedule — delayed until 2029 — isn’t financial prudence; it’s political choreography. By waiting four years, the board ensures that the new payments won’t collide with the retirement of an older bond.
To the casual observer, the levy line may look “stable.” In truth, it’s debt daisy-chaining: one bond rolls off, another rolls on, and taxpayers keep writing checks.
Ask any homeowner still paying down a Red Plan-era assessment what “stable” feels like. The district refinances the calendar, not the cost.
When the 2029 payments start, Duluth residents will owe about $10 million a year for five straight years just on this one bond. For a median-valued home, that could mean an additional $300 to $400 a year in school taxes, depending on property-value growth and state-aid offsets.
Officials point to the district’s A3 credit rating as proof of fiscal health. It’s a decent rating — but it exists because taxpayers have always paid their bills. The rating agency doesn’t judge whether borrowing is wise, only whether citizens are reliable.
Moody’s calls it “low credit risk.” Translated: Duluth always pays up.
That reliability has become the district’s favorite collateral. Every time it borrows without a vote, it bets on the same thing — taxpayer compliance.
The most striking part of this saga is what no one has asked in public session: Should we? Should a district with flat enrollment and a shrinking birth rate continue to load future levies with new debt?
Should elected officials have the right to bypass voters indefinitely under the banner of “maintenance”? When millions are borrowed without consent, transparency isn’t a courtesy — it’s an obligation.
Every large institution learns to weaponize vocabulary. “Routine.” “Maintenance.” “Investment.” Each word lowers the emotional temperature.
But beneath that comfort language are figures that would alarm any city auditor: an additional $12.8 million in interest over five years, layered onto a property-tax base already strained by city and county levy increases.
The phrase “we do this every year” is meant to reassure. It should terrify. Because once debt becomes annualized, so does opacity. Taxpayers stop noticing. Bonding becomes habit. And habit is how accountability dies.
Under the state’s long-term facilities-maintenance program, districts must submit a 10-year plan to the Minnesota Department of Education by July 31 each year.
The plan must outline expected costs for facility upkeep — roofs, HVAC, electrical systems — and detail how those costs will be financed through a combination of state aid and local levy.
If a district chooses to issue bonds instead of paying as it goes, it can do so without a referendum as long as projected debt service fits within its LTFM revenue stream. It’s a legal loophole carved by good intentions: help rural and aging districts maintain buildings without constant elections.
But it has become a back door for quiet borrowing statewide. The Duluth board simply walked through it.
The decision to postpone repayment until 2029 buys time for administrators and board members alike. It spares current leadership from the backlash that would follow an immediate tax spike.
It also guarantees that by the time bills arrive, today’s decision-makers can point to tomorrow’s successors and say, “That wasn’t us.”
No one runs for office on the promise of higher taxes four years from now. By then, the borrowing is baked into the levy, hidden inside the same line where last year’s bond used to be.
The district will argue that not borrowing would be irresponsible — that roofs leak, boilers fail and kids need safe buildings. Fair enough. But responsible maintenance doesn’t require financial sleight of hand. It requires honesty about costs and the courage to ask voters directly.
If the plan is as necessary and well-designed as officials claim, taxpayers would likely support it.
Duluth has always backed its schools when asked straight. What people resent is the end-around — the belief that bureaucrats know better than the public how much debt a community can bear.
Fifteen years after the Red Plan, the district still seems addicted to the same method: centralize decision-making, outsource transparency and assume forgiveness later.
The Red Plan built new schools but fractured public trust.
This bond won’t spark the same protests because the sums look smaller and the language softer. But the principle is identical: borrow now, justify later.
Residents deserve a simple chart: how much total debt the district owes, how much will be added, how long it will take to repay, and what it means per $100,000 of taxable value. No marketing gloss, no “routine” adjectives — just math.
They deserve to know how much of each dollar goes to classrooms versus creditors, to see the state-aid assumptions and what happens if those projections fall short, and to hear a straight answer to one yes-or-no question: Would you still borrow this money if you had to put it on a ballot?
The irony is that Duluth’s schools may truly need the repairs. Nobody disputes that roofs wear out. The question is whether the system that keeps writing checks on the public’s behalf has earned the public’s trust to do it again.
Debt is easy. Transparency is hard.
The district chose the easier path. It may take taxpayers another generation to pay for it — again.
