The Fayette County Board of Education is considering a school tax-rate boost that would raise the district's revenues this year by the full 4 percent allowed by state law.
Under the proposal, the school tax rate on real estate would rise from the current 60.5 cents per $100 evaluation to 62.8 cents per $100. If adopted, the owner of a $100,000 house would pay $23 more in taxes.
The personal property tax rate would go up, rising from 5.2 cents to 5.3 cents. That tax effects mostly business inventory.
Mary Wright, the Fayette Schools' chief operating officer, said that overall, the rate boost would generate an additional $8.6 million in revenue for the district. The additional funds generated by the proposed rate increase are not earmarked for a specific project, but would go into the district's general fund.
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Residents can comment on the proposed rate increase at 5:30 p.m. Sept. 29 at a public hearing at the school district's central offices, 701 East Main St. School board members will act on the tax proposal at their meeting immediately following the public hearing.
Kentucky law allows public school districts to adjust tax rates annually to increase their revenues by up to 4 percent over the previous year. However, any increase greater than 4 percent can be subject to a roll-back referendum. If property values increase rapidly in a given year, a school district might have to reduce its rates to keep revenue growth within the 4 percent window.
The Fayette County schools raised tax rates last year to get a 4 percent revenue increase. A larger increase was approved in 2007 to raise money for renovation and construction of school buildings. There have been some years, however, when the school board cut rates to stay within the allowable 4 percent revenue increase.
Statewide, public school districts — particularly larger ones — usually take the full 4-percent increase allowed by law because it's too hard to make up for the revenue loss in later years.
"Historically, that's what we've done," Wright said. "We have increasing inflationary costs that we're dealing with, and this kind of keeps us even with what we're trying to do."
In many places across Kentucky, school tax-rate increases seem to be a harder sell this year.
"Statewide, any increase has been far more a point of local contention and debate than in any year probably in the last decade," said Brad Hughes, spokesman for the Kentucky School Boards Association. "From a statewide perspective, there have been more people showing up at tax rate hearings than in any recent comparable year, according to the local news reports I have seen."
School boards often pass rate increases by unanimous votes. But Hughes said he's noticed many more split votes this year. He traces that to one central fact: "Absolutely, it's the economy," Hughes said.
The rate process operates roughly like this: Each year the county property valuation administrator in each county establishes the value of property in that county and reports it to the state. The Kentucky Department of Education then calculates various proposed tax rates for the county school board to consider that would either keep revenues unchanged or increase them by up to 4 percent.
Although the tax is increasing, for individual tax payers the increase would be small, Wright said.
"It's important to understand that good communities are committed to quality education, and the public has been very supportive of continuing to fund us," Wright said. "So I think it's prudent for us to continue to take the 4 percent, and be diligent about preparing for the future."