Shortly after the start of the school year, all Kentucky school districts must determine local school tax rates. The LaRue County Schools Board of Education is considering proposed 2019 tax rates of 51 cents per $100 of assessed value on real property and 51 cents per $100 of assessed value on personal property.
The district is committed to keeping community members informed about our schools’ funding needs as well as how local taxes affect our schools. As an education provider, a resource for families, a major employer and a catalyst for preparing our youth for college and career, our school district is an asset to everyone in the LaRue County community.
District leadership, including our elected Board of Education members, need to know about the support and concerns of our community as well.
Community members are encouraged to find answers to common questions here. If you have additional questions, please contact the superintendent’s office at 270-358-4111 or your board representative.
The Board of Education will listen to public comments on the proposed tax rates at 7 p.m. Wednesday, Aug. 28, in the LaRue County High School media center. A special board of education meeting will follow, where the board is expected to vote on the 2019 tax rates.
Frequently Asked Questions
What are the district’s property tax rate options?
The vast majority of school districts opt to levy the compensating rate or the 4 percent rate. These are the two options that are not subject to voter recall, as allowed by the state of Kentucky.
Compensating Tax Rate: The compensating tax rate is a rate that when applied to the current year’s property assessment, excluding new property, produces revenue equal to that of the prior year.
4 Percent Tax Rate: The 4 percent tax rate is a rate that when applied to the current year’s property assessment, excluding new property, produces 4 percent more revenue than the prior year. The 4 percent rate does not refer to a 4 percent increase in taxes.
What tax rate is proposed for LCS?
LCS has proposed the 4 percent tax rate. This equates to a tax rate of 51 cents (per $100 of assessed value) on real property and 51 cents on personal property.
How do LaRue County tax rates compare to other districts?
In 2018, the LaRue County community had the lowest school tax rates in the region, with total real property rates of districts in the surrounding counties ranging from 52.2 at Green County Schools to 83.7 at Bardstown Independent. Considering only the county school districts in surrounding counties — independent districts tend to have higher tax rates than countywide districts — the average 2018 real property tax rate was 61.5.
LCS has consistently been one of the lowest taxing districts in the region for years, and will remain so. With a rate of 50.3 in 2018, LaRue County’s rate has been the lowest in the region for several years. If the Board of Education elects to set the rate at 51 cents, LaRue County property owners would pay rates lower than any 2018 rate in surrounding counties. The rate will almost certainly remain the lowest in the region in 2019.
What will the 4 percent tax rate option mean for LaRue County property owners?
Tax bills depend, of course, on the value of a particular property. At the proposed real property tax rate of 51 cents, the owner of a $100,000 home would pay $510 annually, up $7 — or about 1.4 percent — from last year’s $503.
How will the 4 percent tax rate benefit schools and the community?
The 4 percent rate will generate about $245,528 more revenue than last year, and that includes new property assessments.
The gap between needs and available funding continues to widen, and while the additional revenue generated by the 4 percent rate will not cover the district’s unmet needs, it will help. These funds will help maintain programs, equipment and facilities for LaRue County students, employees and the community at large. The new funds will be allocated as follows: cost of collections, $9,821.13; building fund, $28,404.23; and general fund, $207,302.77.
What is at risk?
LCS is measurably one of the highest performing school districts in the commonwealth. Our district continues to provide new and meaningful opportunities for students, and students continue to accomplish great things both in and outside the classroom. However, the district needs new revenue to keep up with climbing expenses, to maintain quality services and plan for the future.
At the end of the 2018-19 school year, LCS’ yearend balance is an estimated $4.095 million. Acting with frugality and budgeting conservatively, the district held the yearend balance (reserve funds) steady over the last year. Over the last two years, the yearend balance decreased by about $540,000 as expenses outpace revenue.
The district continues to make up for cuts in state funding as well. For example, this is the second year the district has received $0 in state funding for professional development or instructional resources. Also, this school year, state funding for preschool is dropping by about $50,000, and federal Title 1 funding is down more than $11,000.
It’s important to note that salaries and benefits are the school district’s greatest expenses. In the 2019-20 tentative budget, the district’s estimated income is approximately $14.8 million. Of that, about $14 million is allocated to employee expenses. LCS offers some of the region’s more competitive teacher salaries. It’s a strategy to attract and retain the best teachers. It has delivered positive results for our students, families and community, and LCS is committed to maintaining teachers’ salaries that are as competitive as possible. Further, district leadership has recognized a need to review its less competitive classified salaries.
How would the proposed tax rates affect the district’s building fund?
LCS’ slow-growing bonding capacity — or the district’s ability to finance facility improvement or construction projects — continues to be a concern. The district’s latest District Facility Plan, completed in 2017 by various district and community representatives, lists renovation and construction priorities.
State law requires the district to contribute to and manage its building fund separate from its general fund. The building fund may only be tapped for construction priorities and debt service. Of the approximately $245,528 additional revenue the proposed tax rates would generate, LCS would allocate $28,404.23 to the building fund, as mandated by state law.
The board recently awarded a bid of approximately $3 million for the high school greenhouse and football stadium project. This will provide much-needed upgrades. We are also blessed to have a hard-working and knowledgeable maintenance staff that keeps our facilities in the best condition possible given our limited resources. Still, there are many major facility needs for which the district must prepare.
While the district could elect to earmark additional tax dollars for construction projects, it is highly unlikely given the current general fund needs.
More information about Kentucky school taxes is available at https://education.ky.gov/districts/SEEK/Pages/Taxes.aspx.