Daily Independent (Ashland, KY)

January 6, 2014

Area administrators, others say local taxes can’t make up shortfall

Mike James
The Independent

ASHLAND — Suggestions from state House leaders that school districts can take up the slack where state funding has fallen short are meeting with dispute, with area administrators and others saying local real estate taxes can’t close the funding gap.

Raising property taxes the maximum amount allowed by state law would not solve problems, even if districts wanted to impose them, they say.

“What we are hearing from our folks is that districts already have been making up for what the state has not been providing for the last five or six years,” said Brad Hughes, spokesman for the Kentucky School Boards Association.

State Senate President Robert Stivers, R-Manchester, had said local districts could bring in more money because of rising property valuations.

“Stivers doesn’t understand the math. You can’t make up enough with local taxes to offset what has been cut,” said Don Fleu, finance director in the Boyd County district.

The state froze its school funding program following the recession that began in 2008; rising enrollments and costs made that equivalent to cutting per-pupil spending.

Boyd’s board could elect to impose the 4 percent tax hike, but that wouldn’t come close to making up for the amount the district is losing from the state, Fleu said.

Taxpayers in the Greenup County district were hit with the 4 percent increase for three years in a row, business manager Scott Burchett said. The school board declined to impose the increase for the current school year and instead opted for the compensating rate, which adjusts the tax rate based on changing property values to bring in the same amount of revenue as the prior year. “We were pushing our rates so high and we didn’t want to burden our constituents,” Burchett said.

Burchett also says local taxpayers can’t shoulder the burden. “It’s not realistic to expect local revenue to close the gap, even if we took the 4 percent every year,” he said. The General Assembly “is just kicking the can down the road,” he said.

Poorer districts, which include most of the districts in eastern Kentucky, can’t bring in as much revenue per pupil as richer ones can, according to a study by the Kentucky Center for Economic Policy in Berea.

Even though on average poorer districts don’t have lower taxes, they have significantly less wealth to tax, according to the study.

Thus, in a wealthy district like Anchorage Independent in Jefferson County, a 4 percent hike would bring in $457 more per pupil, while at the other end of the scale, in the East Bernstadt Independent district in Laurel County, the same increase would add only $14 per pupil to the district’s coffers.

What is worse, according to Fleu, is poorer districts typically have greater needs for at-risk children.

Shifting the burden to districts is contrary to the intent of the Kentucky Education Reform Act that initiated the current system of school funding, said Hughes. KERA settled in the courts that the responsibility for education funding lies with the state, he said.

“And here’s what people forget. We have districts that have taken the 4 percent year after year and are still struggling to pay their bills,” he said. “So if everybody took the 4 percent it’s not going to solve problems, except maybe for legislators because it will put the criticism on the backs of school boards and superintendents.”

MIKE JAMES can be reached at mjames@dailyindependent.com or (606) 326-2652.