The new property tax rate adopted by the Letcher County Board of Education is estimated to generate about $4.6 million for the school district, school officials say.
The board voted 3-2 to approve a four percent increase on the property tax rate after a required 30-minute public hearing was held in the conference room at the school bus garage.
Board Chairman Robert Kiser and board members Mendy Boggs and Dr. Sam Quillen Jr. voted in favor of setting the general fund tax levy at 50.9 cents on real property and on personal property, which includes .2 cents for exoneration. It’s expected to produce $4,646,908.70, of which $960,796.62 is from real estate and personal property. If 100 percent of taxes were collected, the district would receive $192,475 more than the compensating rate. Roger Martin, district director of state and federal programs, said it is more realistic that between $180,000 and $185,000 more will be collected.
Motor vehicle and utility tax rates will remain the same as last year. The board approved a motor vehicle and watercraft property tax rate of 49.6 cents per $100 assessment and a three percent utility tax.
“Teachers and classified staff need the supplies and need the materials and need their funds to operate in the classroom,” said Regina Brown, president of the Letcher County Teachers’ Organization.
Quillen said the board should try to keep in place as many school programs and faculty members as possible.
“I’m not an expert on economy, but our economic landscape has changed drastically in Letcher County,” said Quillen. “I think we need expanded programs. We need to diversify our educational opportunities as much as we can. If we start cutting programs I’m afraid in the long run it will make our economic situation even worse.”
Quillen suggested people could pay for the tax hike by not buying “maybe a case of pop here or there, or a carton of cigarettes” and putting that money instead toward educating students.
“I agree with what Doc Sam is saying and add to that that once we get everything lined out hopefully next year we can lower this rate and bring it back to where we are at,” said Kiser. “If we don’t raise the rates, I feel we are going to have to look through and find several positions to cut out.”
Board members Will Smith and Terry Cornett voted against increase.
“I can’t help but feel that a vote against this would be voting for cutting staff, cutting programs that we have worked hard over the past few years to establish,” said Quillen.
The compensating rate of 48.8 cents was expected to produce $4,472,764.19 in revenue. The compensating rate would have basically generated the same amount of revenue the school district received last year, Martin said.
“You say well it if is going to generate the same amount of revenue then why isn’t it the same rate as last year?” said Martin. “The assessment has gone down, the rate would have to go up to generate the same amount of revenue. It’s kind of been a rollercoaster with assessments which matches the economy.”
Last fall, the board also approved a four percent increase, which allowed the first one percent raise in seven years for classified and certified employees. The approved rate for 2012-2013 was 46.1 cents on real property and personal property, which brought in $4,330,379.88.
The recently approved rate of 50.9 cents per $100 of assessed property is an increase of 4.8 cents from last year’s rate of 46.1 cents for every $100 of assessed value.
Letcher Schools Supt. Tony Sergent said that for homeowners with houses valued at $50,000, the tax bill would increase by only $24.
“Two dollars a month is not substantial,” said Sergent. “It’s a small increase for the public. The revenue for us is substantial. It is something that I support.”
Letcher County Property Valuation Administrator Randy Hall assesses property and sends the assessments to the Department of Revenue. Once the property values are set, the revenue cabinet sends that information to the Kentucky Department of Education. The school board is then given the tax calculations.
Martin said equipment and inventory has decreased because of a lull in the mining industry.
“The real estate assessment has actually grown a little bit,” he said.
The real estate assessment increased $3,794,361 from last year’s assessment of $714,020,386.
Martin said 5.9 cents of the total property is required to produce the five-cent equivalent tax necessary for participation in the School Facilities Construction Commission (SFCC) and Facilities Support Program of Kentucky (FSPK) programs.
He projected $522,000 will go into the FSPK fund, of which $470,000 will be matched by the state. The money will be used to pay bonding indebtedness, Martin said.
“We thought where we did this back in January we thought at that time the assessment rate would go up normally like it did last year,” said Martin. “But that wasn’t the case at all. Not only did it not go up, it went down about the amount we thought it would go up.”
He recommended the board approve the four percent increase in an effort to balance district revenues and expenditures.
“We’ve got to have revenue for the year that equal expenditures for the year and this won’t make this exactly happen, but it is going to help us with that,” said Martin. “Last year our expenses exceeded revenue by about $600,000. Obviously this is not $600,000 but this is a step in that direction. Obviously we can’t keep spending more than we have here in revenue.”
The board unanimously approved the same sheriff ’s tax collection rate as it did last year. The collection rate is four percent for the first month and three percent for the remainder of the collection period.