By Seth Littrell
Register News Writer
The Berea Independent School District will see reduced tax rates this year thanks to climbing property values.
According to Superintendent Mike Hogg, the Madison County property valuation administrator assessed Berea property values at more than $25 million, or about 13 percent, above last year’s total assessment. This would represent a large increase in revenue for the schools, but state law allows property taxes to only generate up to 4 percent more revenue than the previous year without a referendum.
If the board decided to maintain its current tax rate, the amount of money collected would exceed 4 percent, and the rate could have been rejected by the voters. If a tax rate is overturned by referendum, it reverts to what is known as a compensation rate, with the taxing district receiving the same amount of revenue as the previous year.
However, Hogg said the increased property values means state contributions to the district under the Supporting Education Excellence in Kentucky program will automatically decrease about $46,500. This put the school board in “a unique situation,” he said, where the schools would be underfunded by $46,500 if the board chose the compensating rate.
The board enacted a rate calculated to generate the 4-percent revenue increase, $70,028, which will offset the lost SEEK money and give the board additional funding of about $23,500.
Even with the increase to offset lost SEEK funds, Berea taxpayers will see their rates lowered. The rate for real estate taxes was dropped from 91.7 cents to 83.7 cents per $100 of assessed value, and the personal property rate will go down from 91.7 cents to 87.1 cents.
As an example of how that change will affect households, Hogg said a house valued at $100,000 would pay $837 in taxes with the new rate, compared to $917 with the old one.
As for how the new money generated by the 4 percent increase will be spent, Hogg said most of it will go toward paying the salaries of school employees and teachers because that’s what the lost SEEK funds covered.
Nearly $6 million, about 78 percent of the school board’s budget, covers the salaries and benefits of employees. Another 10 percent, about $793,000, pays for contract services, which is any service a school needs to pay an outside person or company to provide, such as repairs, plumbing, physical therapy for students and mowing the grass.
About $685,500, another 9 percent of the budget, is set aside to cover supplies, materials and all school utility payments. Finally, the remaining 3 percent of the budget, more than $237,000, is used for technology, vehicles, maintenance and field trips.
Seth Littrell can be reached at email@example.com or 624-6623.