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COLUMN: To tax or not to tax?

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School district faces tough decision, but it's one other taxing districts might like to have

By Shannon Brock

Our economy is not one to be envied these days, but perhaps the position the Anderson County school district is in is more enviable than you’d think.

Taking off my journalist’s cap and slipping on the one where I’m simply an Anderson County resident, I can totally identify with the six or so residents attending last Thursday’s public hearing regarding the tax rate about to be levied by the school district.

One lady, whose name I did not get, said, “There are no jobs. There is no money.”

Ain’t that the truth?

I am extremely thankful that I do have a job, but there are several examples of rising unemployment numbers within my own family.

Times are tough, and they’re getting even tougher with local taxing districts amping up their rates.

But the school district finds itself in a unique position.

Let me backtrack, the county and city just passed what is called a “compensating rate.” This means the tax rate will provide each entity with approximately the same amount of revenue it received from taxes last year.

The tax rate is based on overall property assessments, so it’s easy to infer that if tax rates are going up, property assessments are going down. One has to balance out the other — that’s what the compensating rate means.

The compensating rate is the lowest possible rate the city and county, for example, are allowed to take. Short of marching on Frankfort to demand a change in state law, it’s the best those officials could do.

However, the laws are a little different in regard to school districts. Last year, the school district didn’t change its tax rate at all. It didn’t even take the compensating rate, which meant it took in less revenue from taxes than it did the year before.

This year, the compensating rate for the school district — the rate the district could take to receive roughly the same amount of local revenue as last year — is actually lower than the current tax rate. It’s only a fraction — a .72 percent rate decrease, or about $4 less on a house valued at $100,000 — but it’s still lower.

But, that option has pretty much been thrown out the window.

Can you blame them?

Here’s what I find enviable about the school district’s position: the board could vote to leave the tax rate exactly the same and still bring in more local revenue than it did last year.

Ask city or county officials if they would like that option. To bring in more money, but leave the tax rate where it is — I bet they’d jump on that in a heartbeat.

Unfortunately it’s not as simple as that for the schools. Over the next year, the school district is facing cuts from other sources and new unavoidable expenses (like salary step increases) amounting to nearly $2 million. This includes $1.2 million in American Recovery and Reinvestment Act funds.

Even the extra $240,000 a 4 percent revenue increase tax would bring in doesn’t make up for that.

Maybe I don’t envy the decision board members have to make — tax the people or make more cuts in education? — but I am saying it’s a position not to take for granted.

Follow Shannon Brock at Twitter.com/ANewsSBrock.