School officials will make an application to the Kansas State Board of Tax Appeals (BOTA) requesting the authority to increase local school taxes due to extraordinary growth.
A unanimous board agreed to make the request during an April 13 board meeting.
School business director Jeremy McFadden said the extraordinary growth funding, or EGF, is similar to local option budget (LOB) funding. In January, USD 231 voted to allow the school board the authority to increase local property taxes by up to 33 percent of the district’s budget. With BOTA approval, USD 231 would be able to increase taxes to raise up to an additional $1.5 million for the next few years.
McFadden explained that the increased authority would allow school officials to guarantee funding it would have received due to growth under the old school finance formula.
Legislators approved and Gov. Sam Brownback recently signed a bill eliminating the school finance formula, which funded schools per weighted pupil. Districts received added student population counts based on things like how far students were bussed to schools and the number of students on school lunches.
Under a new proposal, school districts will be funded with block grants at 2014 levels for two years.
“To summarize, it’s take our funding that the school district receives in the 2014-2015 school year, and essentially freezes it for the next few years,” McFadden told board members. “…All the elements that went into the school finance formula are frozen.”
McFadden said the district will likely see 120-180 new students every year for the next few years. The block grant funding will not take into account added students. Because the block grants will not take into account added students, it will likely cost USD 231 $1.5 million in additional funding.
“It doesn’t take long for our district to understand that that is not the best model to sustain our district,” McFadden said.
The LOB authority voters recently approved is a permanent taxing authority. The BOTA extraordinary growth taxing authority would sunset.
McFadden said it would affect the mill levy, or local tax rate, by as much a 6 mills. That would translate into annual approximate $113 tax increase for the owner of a $165,000 home.
However, McFadden said school officials would potentially try to offset that tax increase by lowering mill rates in other parts of the budget.
“Our recent efforts to bring down our tax rate – that is our goal to keep it at that level,” McFadden said.
Property values have increased the last few years, which may also help offset the need to use the additional taxing authority.
McFadden said the board doesn’t have use the authority, though.
“I think it’s appropriate for the board to have the tools to take care of current needs,” he said.
Board member Brad Chandler agreed. He said the taxing authority would be more of a cushion or a reserve to be used only if needed.
“We don’t need to reach into every pocket,” Chandler said. “But we need to make sure that we don’t need to fire teachers… this is a good way to set us up to be ready or be potentially ready.”
District to seek extra tax authority