September 23, 2013

Citizens weigh in on school tax increase

Superintendent cites unfunded mandates as cause

By Rob McDaniel
Staff Writer

LAUREL COUNTY, Ky. — The Laurel County Board of Education met staggering opposition Wednesday evening during a public hearing to consider setting the fiscal year 2014 property tax rate for real estate and personal property at a four percent revenue increase over FY 2013.

The hearing opened with words from Board Chairman Joe Schenkenfelder and District Superintendent Doug Bennett.

“The purpose of this hearing is to hear comments from you for or against a school tax,” Schenkenfelder said.

“The most important thing tonight is for anyone who wants to speak gets the opportunity to and that all speakers are heard,” said Larry Bryson, attorney for the Board of Education.

 “Laurel County and the children of Laurel County deserve the best and they should never have to play second fiddle to anyone,” Bennett said. “ Any worthy endeavor requires adequate fundamental resources.  This is precisely the thing that has brought us all together tonight.  The fact is that our state and federal government have failed to adequately fund the education of Laurel County students as well as the education of students across the Commonwealth.  It’s certainly not due to a lack of taxing on the federal and state level.”

Bennett went on to explain why the four percent revenue increase is needed.

 “Our revenues have decreased $1.1 million when you compare fiscal year 2012-2013 actual against 2013 - 2014,” Bennett said. “ Our revenues have decreased, our expenditures have increased and continue to increase for our district.  Expenses have increased not by any fault or mismanagement of the Laurel County School District.  In fact, the Laurel County School District has managed to cut our fiscal year 2012 - 2013 expenditures by $939,000.” 

According to Bennett, the problem is the state and federal governments are adding expenditures faster than the district can cut them.

“We have been told on numerous occasions that local school districts will not receive additional revenue to cover these additional expenses,” Bennett said.  “The rallying cry in the bills that are proposed and come from Frankfort are a collection of unfunded mandates asking school districts and school staff to do much more with no additional funding.”

He said the increase is approximately 2 cents per $100 of assessed property value. The proposed increase would be approximately $20 a year on a home assessed at $100,000 or 38 cents per week. 

“This proposal, by the way, isn’t anything that any of us here are excited about even considering. It is the last thing that any of us would want to do in this time,” Bennett said.  “ But it’s important that you know school districts have no other way of generating revenue at this point. We’ve been told that point blank.”

According to Bennett, the district would use the additional tax revenue to fund objectives which will help increase student learning and the quality of services offered, including the purchase of student text books.

“This funding has been eliminated from the state budget for the past four years,” Bennett said.  “Other things that have been reduced or eliminated include professional development training that is mandated for teachers, that has to be paid for, but is not adequately funded.”

Additionally, the district was forced to layoff 28 classified staff. 

“That’s not a decision that we want to do,” Bennett continued.  “We want to ensure that Laurel County staff is the best staff we can find.  We strive to recruit and maintain the best talent and most caring team of professionals that are available anywhere.”

Additional funding would help offset the operating expenses of the new college and career readiness center, a project that has been several years in development and consideration.

“The funding for all new construction in a school district is separate from the general fund. That comes out of an allocation for capital outlay for restricted funds,” Bennett explained.  “The only thing that money is allocated and allowed to be used for is construction.  That is why it will have no impact what-so-ever on the general fund and the increase in expenditures and decrease on the general funds; it’s a completely separate entity.”

The College and Career Readiness Center will be located on East Fourth Street. 

“This is not a typical government model, a typical state model, or federal model; this is a Laurel County Model that is innovative by design,” Bennett continued.  “It will give our students something that most students in Kentucky and throughout the nation do not have access to.”

The readiness center will have six program areas, including engineering and biomedical science.  It will also have a health sciences program; industrial maintenance program; power sports/ATV technology program, where students will work with small engine repair; and multimedia technology/information technology. 

“Each of these opportunities will prepare students to move directly to the world of work or on higher education in line with current employment opportunities and be more prepared to compete in the global economy,” Bennett said.  “In addition, the center will assist in our efforts to improve and develop new industry to locate in Laurel County.

“Our public education is mandated by the people who stated they want quality education for all students across this great country,” he continued.  “State and federal representatives, in their great wisdom, established that many elements of public education should be willing to do whatever it takes to ensure the people get what they need and deserve for their children.  Local school districts can only do what is within their limited means to do.”

Bennett went on to say that a few minor changes in spending priorities alone could easily satisfy the relatively small needs of school districts nation wide. 

“We should not be asked to compromise the quality of education provided for our children.  The fight against over taxation isn’t here in your local district.”

Following Bennett’s comments, the floor was opened to audience members.

Joel Gilliam, a real estate professional in London, opposed the increase and spoke about what the effects of increased property taxes would do to the local housing market.

“Basically with today’s economy, 95 percent of borrowers are taking out secondary market loans. These loans are basically factored into for things, your payment, your interest, your taxes and your insurance,” Gilliam said.  “Basically, all these things affect the total purchase money that’s out there for most borrowers in this market.”

Gilliam said the predominate range for most borrowers in Laurel County is between $80,000 to $120,000.  The general borrower falls in to that range and defines the local market. 

“Most of the people who qualify for that range are on the fringe of being able to qualify for that loan or not,” Gilliam said.  “Debt to income ratio is the single most deciding factor on qualification so you make X amount of money you have X amount of debt and that percentage can’t go across a certain point.  Because of the relationship of taxes and insurance are factored in for the total amount of money you’re able to purchase, increasing taxes is decreasing the amount of purchase money available for lower income borrowers.”

According to Gilliam, raising taxes ultimately drives down the purchases prices in a community and there’s a decrease in tax revenue when purchase money, which drives the local markets, is down.

Duff Holcomb, a nurse for the Laurel County School District, spoke up in support of the revenue increase stating students need consistent nursing support and schools have to provide for their needs.

“We have 10 full-time nurses and 9,400 students,” Holcomb said.  “Seven schools have full-time nurses and 10 schools are shared between our three board nurses.” 

Holcomb said teachers are being asked to do too much and the students need more from their community.

“For some of these students, the health care they get at school is all they get,” she said.  “I’m totally for the increase in revenue tax.”

David Phelps expressed his outrage by saying, “the federal government, the State of Kentucky would never think of raising taxes during these times, so how can the school board have the gall to ask for a four percent tax increase?”

Several others expressed their disapproval of the increase.  The board is expected to make a decision regarding the increase during their regularly scheduled meeting on Monday at 5 p.m. at the Central Office Administration Building at 718 N. Main St., London.