School board calls for 5.25 percent tax rate increase

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State reneges on per-student revenue, forces pay increase

By Shannon Brock

The Anderson County Board of Education is proposing a tax increase that would create over $300,000 more in revenue than it collected last year.

The proposed rate is 58.1 cents per $100 on real property and 58.1 cents per $100 on personal property, according to a legal advertisement that appeared in The Anderson News.

A public hearing to discuss the general fund tax levy is scheduled for Thursday, Aug. 27 at 5:30 p.m. in the Board of Education Training Room located at 1160 Bypass North.

The general fund tax levied in fiscal year 2009 was 55.2 cents per $100 on both real property and personal property.

That rate produced $7,762,092.65 in revenue. The proposed rate of 58.1 — roughly a 5.25 percent rate increase — would produce $8,067,577.52, a 3.9 percent increase in revenue.

The increase would mean property tax on a home valued at $100,000 would increase about $30 a year.

“This is a larger increase in the actual tax rate due to an increase in people qualifying for the homestead exemptions, [creating] a decrease in assessed property values from the previous year,” said Nick Clark, the schools’ finance officer.

Superintendent Kim Shaw said normally the compensating rate, or the rate that would produce the same amount of revenue as was collected in the previous year, usually stays the same or decreases, but because of the situation with the homestead exemption, even the compensating rate increased.

This year’s compensating rate is 55.9 cents per $100 on both real property and personal property.

“This is the first time I’ve ever seen this situation take place,” Shaw said.

Even though the district is projected and is on pace to save around $240,000 in energy costs, it is still facing other cuts, Shaw said.

The state, which raised Support Education Excellence in Kentucky funds by $43 per student for 2008-09 and planned to do so again in 2009-10, will not be raising SEEK base levels for 2009-10.

That $43 per student was money the district planned on receiving, Clark said.

“The biennial budget [for the 2008-09 and 2009-10 school years] was to include a $43 increase to our base SEEK funding,” Clark said. “This was cut due to the economic conditions.”

The General Assembly also requires school districts to give its employees a 1 percent salary increase, but isn’t providing the funding to do so, Shaw said.

District 44 state Rep. Kent Stevens said protecting funding for elementary and secondary education is still a goal of the General Assembly.

“Everyone is aware of the financial condition of the state,” Stevens said. “We are struggling like all other states.

“While I understand that an increase would benefit all school districts, I have to balance this with the impact on all other agencies in state government. To me, a decrease in state funding is giving less money to local school districts. The General Assembly did not provide an increase but at least we kept the funding at the current level.”

Stevens said many other state agencies had budget reductions during 2008-09.

“Elementary and secondary education base level funding has been protected during our current budget crisis,” he said. “Our basic funding program (SEEK) has increased one year of the biennium and then held constant for the second year.

“Am I pleased with the level of funding for our schools? No, it is not where I would like for it to be in many areas. Am I satisfied that we have done our best to maintain the base funding level per pupil during an extreme financial crisis in the state? Yes I am.”

Ultimately, the school board will decide whether to approve the proposed levy or accept the compensating rate, Superintendent Shaw said.

“Running the [legal] ad gives the board time to consider its options,” Shaw said. “With the economy, the board has a tough decision to make.”

The schools are facing declining revenue and the board has to balance that with the current economy, which is hitting many local people hard, Shaw said.

In the past, the board has called a special meeting immediately after the public hearing to make a decision on the tax rate, and Shaw expected members to do the same this year.

E-mail Shannon Mason Brock at sbrock@theandersonnews.com.