|The Board of Education building. FTM file.|
It is that time of year again. The time when school boards, municipalities and county governments set the tax rate which will be charged for the property taxes that we all pay on our homes.
Even those of us who typically pay attention to local government, especially when it impacts our wallets, are stumped by why these taxing entities are compelled to exercise their legal option to increase revenue by 4% every year. Although the law does require taxing entities to announce and hold public hearings every year, the extremely poor attendance by taxpayers and the silence which results, indicates that the public has accepted these perpetual tax increases, even without really knowing why or from where they come.
Raising tax revenue by 4% every year, forever, has unfortunately become a way of life for some communities across the Commonwealth of Kentucky. Here is why.
STATE SYSTEM OF COMMON SCHOOLS
As my background is as a School Board member in Fort Thomas for eight years, I will focus on how this state-wide tax system and the conspicuous passing of the buck by the General Assembly adversely impacts school funding, and thus the school portion of our local property taxes.
According to the Kentucky State Constitution, we, in Kentucky, have a state system of common schools. The idea is that families with children pay less if we all pay a little and also revolves around the early realization that a more educated population provides for a better society and a healthier economy for all than the alternative of illiteracy and ignorance.
Although our schools are organized by county and/or school district, with local Boards elected to handle the local administration of the schools, they are actually an extension of state government and school board members are actually considered state officers.
In specific terms, the law requires that every child, in every district, specifically naming “rich” and “poor” districts, receive adequate and equitable funding.
That is what is supposed to happen.
The state is supposed to be the primary source of funding with every student, no matter their district of residency, receiving an equal share which Is to primarily come from the state. It is a state system and the state is legally bound to may most of the bill.
THE SUBVERSION OF “RICH” VS. “POOR”
State money is specifically NOT supposed to account for equalization of “rich” and “poor," but political subversion of what constitutes “rich” and “poor,” along with a position of majority rule in the General Assembly, has systematically siphoned off copious amounts of revenue from some districts, primarily the suburban areas of Greater Louisville, Greater Lexington and Northern Kentucky (the triangle).
The chronic funding shortage which arises from our state revenue being diverted to the rural majority is what requires that local boards vote to tax ourselves in order to increase revenue 4% every year or else run deficits, up to and including ultimate insolvency, which they are precluded, by law, from incurring.
So why the fundamental imbalance? We are primarily comprised of commercial or residential property. These areas are most commonly fully taxable under property tax rules. Because areas with commercial and residential property have the capacity to generate property tax revenue, we are labeled by the rural majority as “rich.”
Alternatively, the rural majority, those areas which are primarily comprised of agricultural property and which carry a majority of votes in the General Assembly, DO NOT pay local property taxes because they are subject to the state agricultural exemption. Because they do not pay property taxes, (wouldn’t that be nice?!) they have labeled themselves poor and do not contribute to the education of their local children.
Since they of the rural / agricultural majority do not fund their local schools, guess who does? Correct! Those of us in the Triangle, who now must either raise our local taxes perpetually or face the decline and ultimate insolvency of our local schools.
Never mind that the “rich” or “poor” status of communities is legally irrelevant to state school funding, (according to state law) or the fact that we are not really talking about wealth or poverty, only the willingness to tax ourselves or the legal exemption from paying their fair share which is enjoyed by the rural, agricultural majority.
Before the bleeding hearts in the crowd chime in that I am being insensitive to those who are genuinely impoverished, I would be quick to point out that Federal funding is almost exclusively based upon the verifiable socioeconomic status of each and every child in the district.
This is no smoke and mirrors stunt like being played by the agricultural majority.
In the case of Federal money, districts like Fort Thomas might not be rich, but we actually have the least percentage of our population which qualifies for government assistance. Because we draw the LEAST amount of Federal funding, the mythology of the streets being paved with gold in Northern Kentucky is only bolstered further.
Free from government assistance is definitely not the same thing as wealth, but when combined with the fact that we tax our commercial and residential poverty, (which actually leaves our households with LESS disposable income) the only story which the General Assembly believes is that we are rich, they are poor, they get a double share of state money, plus up to thousands more per pupil in Federal money and can get away with paying either relatively less or nothing at all on a local basis.
WHY INCREASE AT ALL AND WHY 4%?
Those who support effective public education will volunteer that as long as the majority of the money goes to the classroom, they are ok with school spending. If we take a look at a typical school district budget, we will find that 70% to 80% of the budget goes to paying for the best teaching talent that we can afford.
Finding skilled educators with Masters degrees or better, proficient in cranking out successful students which will bolster our economy and keep them off of government assistance, is an art form.
For those who have not looked into the minutia of requirements that must be met by our teachers, I would advise that it is a miracle that anybody, except for their love of teaching and their commitment to our students, would forego the relatively higher compensation of private industry in order to jump through the hoops necessary to secure and retain teaching credentials. The teaching profession is a far cry from the nine month walk in the park that many presume it to be.
A fact of life in funding teacher payrolls, the consolation prize for the relatively low pay for advanced education, is that for every year of service, for every successive degree or certification, the payroll goes up.
The only correction is that as older, more experienced teachers retire, younger, less experienced teachers cost less.
In keeping with its obligation to be the primary source of funding for the education of every child in every district, this dynamic would lead us to believe that funding from the General Assembly should go up every year. The reality, however, is that since the General Assembly places re-election first and taking care of the people’s business last, state revenue very seldom goes up, even when that means that bills that the state is obligated to pay go unpaid and/or get pawned off on local taxpayers and local school boards.
As for why 4%? There was a law passed in the late 1970’s, KRS 160.470, alternatively known as HB44, which made legal provisions for local taxing authorities, schools, counties, cities, etc., to raise revenue by 4% every year, at its discretion, in order to cover the nominal rate of inflation.
Given that the General Assembly fails, on a chronic basis, to adequately or equitably fund we districts of the Triangle, given that teacher payroll goes up every year, given that everything from building materials to electricity to water to toilet paper goes up every year, we districts of the Triangle have no choice but to raise revenue by 4% every year or else be guilty of financial malpractice.
WHAT IS THE SOLUTION?
During my time on the Fort Thomas Board, I rekindled an old effort to pursue a legal invitation from Judge Thomas Wingate of Franklin Circuit Court. Wingate’s invitation, simply put, was that we had made a case in our Brief that funding formula was not satisfying its Constitutional obligation to equitably distribute state school funds to every child in every district.
It is my personal belief that if we are to secure long-term relief from the inadequacies and inequity of the funding formula, the time for negotiation has come and gone.
Mr. Johnson served eight years as a Board Member of the Fort Thomas Board of Education, during which time he served on the District Budget Committee and Chaired the District Funding Tax Force, the latter dedicated to improving state funding of local schools. Mr. Johnson is currently pursuing a Master of Arts in Teaching, with an emphasis on Social Studies and Public Policy.