You probably noticed the article in the paper about our board of education considering a tax levy in February. Since you may get questions about this and it is super complicated, I thought I would give you a short, simple version of what we are trying to accomplish for our district.
Since 2005 our district has been levying two nickels as part of our tax rate to fund facility upgrades and improvements. The Kentucky school funding model provides the opportunity for the state to match each nickel with state funding. Because the district missed a procedural deadline back in 2005, we have only been eligible to receive state matching funds for one of the two nickels. This means we have been losing about $1 million in state funding.
Over the past few years we have worked in collaboration with the Kentucky Department of Education and our local legislators, especially Senator Bowen, to devise a plan that will make the district eligible for increased state funding. If this measure passes, it will capture additional state revenue for the district without increasing local taxes.
The following are the key highlights of the plan:
Ø Most important thing to know!!
o If this effort is successful, the district will be eligible for an increase of about $1 million revenue from the state while keeping our local tax rate the same.
o If unsuccessful, the district will lose $1 million in state revenue and will be forced to increase local property taxes.
Ø What is a nickel tax and how is it used?
o A nickel tax is a percentage of the current school district tax that is used to generate funds for construction and renovation of facilities. It also impacts the district bonding capacity. If successful, it would increase OPS bonding capacity by over $12 million.
o If passed, OPS will be eligible for the state to authorize matching funds on every dollar OPS collects from taxes.
o This translates to an additional $1 million in state funding!
Ø How the plan will work?
o On February 23 the Board of Education will consider a nickel increase, setting the tax rate from 85.8 to 91.6
o Between April and August, the state will recognize this and make OPS eligible for additional revenue from the state.
o The Owensboro Board of Education commits to rolling the rate back to 85.8 cents in August before the new nickel takes effect in October. This means no increase in local taxes.
o If the effort is not successful, the Board will be legally required to take a 4% increase in local property taxes thus raising local taxes for everyone.
Thanks for taking the time to read this. It is in everyone’s interest that we work together to make sure that our community understands the key opportunity we have to increase our state revenue without raising local taxes.