In Sept. 30 Issue
School board members unanimously voted to approve the 2010-11 real estate and personal property tax rates that raise the rate 4 percent from last year in a special-called meeting last Thursday afternoon.
The new general fund tax rate is 48.6 cents per $100 of assessed value on both real property and personal property for this fiscal year.
A year ago the real property rate was 47.2 cents and 47.6 cents on personal property. The rate passed last Thursday is one of three rates calculated by the Kentucky Department of Education based on numerous pieces of information, such as the property assessment values as reported to the Department of Revenue by the local PVA office and prior year collection information to calculate the permissible rates.
These rates are then certified to the districts, according to Marla Carnes, the director of business operations at the board of education.
She said the compensating rate is a rate designed to produce roughly the same amount of revenue from property taxes as was collected in the prior year. The 4 percent rate is designed to produce 4 percent more revenue from old property that was collected in the prior year, she said.
The Kentucky Department of Education also send a rate called Subsection 1, which tends to be the highest rate and is calculated to produce the same revenue as the maximum rate in the prior year, excluding the increase in value of old property and new property.
Carnes said it is important to note that approving the 4 percent rate does not mean a 4 percent increase in the tax rate. This year's 4 percent tax rate of 48.6 on real property is actually an increase of 1.4 cents for every $1,000 of assessed property value.
She said, for example, if someone had an assessed property value of $100,000, their tax would have been $472 last year.
Assuming the property value stayed the same $100,000 for this year then their taxes at the new rate would be $486, an increase of $14 for every $100,000 of assessed property.
Carnes said one final consideration is that not all of the increase in taxes may be attributable to the increase in the school tax rate. There are several other factors that impact the total tax bill for a person, including any tax rate increases from other taxing entities in the county and any increases in the assessed value of a person's property.
Board member Harry Kimbler said this is the first time the school board has raised tax rates in about a decade.
All board members and Supt. Pickett agreed this was not something they wanted to do but rather something that had to be done for the sake of the school district, which has seen cuts in state funding this year.
"If we don't do this we lose several hundred thousand dollars because it will go back to a recessed tax rate," Pickett said. "It's not an easy decision."
Pickett said the district was looking at all possible avenues in order to save money, and that raising the tax rate would help the school system continue on financially.