Going into this past legislative session the state was facing a revenue shortfall. When there is a shortfall in revenue, cuts are made across the board to address the shortage. With public education being a large portion of the state’s budget it was likely that public education would see some cuts.
When the session ended, Big Sandy School did not see a decrease in our budget as our budget stayed relatively the same, but how our budget was funded changed dramatically. In order to maintain the same general fund budget the state chose to take a portion of that funding that the state normally funds and shift that responsibility to the local taxpayers. This was done with the passage of HB 647 which provided a short term solution to the state budget situation and phasing in a larger contribution from the state each year to fund schools. It was the goal of this bill that by the end of four years most schools will receive more state funding then they currently are and shift the tax responsibility back to the state.
Not all schools faired the same way at the beginning of this tax shift or at the end of the four years. What does this mean for the local taxpayers of Big Sandy Schools? The news is not good, as we are one of the most impacted schools in the state. The reason we are heavily impacted has nothing to do with previous spending, or previous taxes but through a very complex funding formula. We were told we were one of the “unfortunate districts” who will not see any tax relief through the provisions of HB 647.
What are the specific numbers when it comes to the local taxpayers of Big Sandy? For the current budget year the trustees milled 105 mills to fund their general fund budget which is actually 36 mills lower than they were 7 years ago. We have worked very hard to stabilize our local property taxes while maintaining what we need for students and staff. Due to the tax shift imposed on us for next year, the trustees will have an automatic INCREASE of 24 mills in their general fund budget. This is approximately a 23% increase in your local property taxes for the school on the general fund budget and it is imposed by the state and there is nothing we can do about it. Over the course of the 4 years the tax burden is decreased slightly but Big Sandy never gets back to where we are now. Some schools will see a tax decrease in as short as two years, but Big Sandy will not see a decrease. At the end of 4 years, we will still be seeing a tax increase of 10% from where we are now. Because this tax shift is imposed to fund our base budget the trustees have no control of it as the base budget is the minimum budget required by law. The 24 mills imposed for next year that was previously funded by the state will now be funded by our local taxpayers. It is very discouraging for the trustees and administration who have worked hard over the past several years to stabilize the local property taxes to see this come about this year. We knew going into the session that we would probably see some cuts to education and we were prepared to deal with that, but few saw this major shift in tax burden coming and how dramatically it impacted Big Sandy Schools .
Where do we go to from here? In our efforts to be completely transparent and provide full disclosure, we want our very supportive taxpayers to understand what the future brings for them. The 23% increase in taxes to fund our general fund budget is now law and there is nothing the trustees can do about that. That increase is imposed by the state, and over the course of the next 4 years school taxes will be higher than they are now.
As you all know there is a bond election coming up in June for the building of a new swimming pool. That potential tax increase will be decided by the qualified voters of the district. That bond is calculated at approximately 44 mills and specific tax information can be found on the Big Sandy school website.
What is the potential impact for our local taxpayers with all combined? Our school district taxed 150 mills this past school year to fund our general fund and the other funds of transportation, bus depreciation, tuition, adult ed, and technology. The amount has been the same the last couple of years.
With the legislative change, for next year the minimum mills imposed will be around 180 mills, 24 additional mills imposed by the state and a few mills to deal with inflationary increases of the other funds. If the pool bond passes and adds 44 mills to that, we will be at around 224 total mills or about a 50% INCREASE in local taxes. The total amount, should decrease slightly over the next 4 years, but we have another legislative session to deal with in that time period so things can change drastically as they did this year. The pool bond will be paid off in 10 years and then those 44 mills would not be taxed anymore.
You as taxpayers have some big decisions to make in the next month. I encourage you to talk to school trustees or school administration if you need more information, as we want to make sure you have all the facts in the upcoming month. Stop in or give me a call anytime.
