Danville Ind. board ponders nickel tax instead of asking for 4% revenue increase; added benefit would be matching state funds, ability to upgrade facilities sooner

Advocate-Messenger, Danville, Aug. 12, 2015

Danville school board considers nickel tax
by Kendra Peek

In an effort to fill the gap in the plan to renovate its schools, Danville Board of Education is contemplating a move similar to one taken by the Boyle County school board in May.

A public hearing will be held Monday that will weigh in on whether or not the board will implement a recallable nickel tax increase on the 2015 tax bills.

The rate is currently 86.7 cents per $100 of property valuation. The proposed increase would raise the rate to 92.3 cents per $100, said Joy Campbell, Danville's finance officer, and would generate $441,000 annually for the building fund.

“What that does for us is generate $5.5 million in bonding potential,” Campbell said.

Board Chairman Lonnie Harp said the nickel tax increase is replacing the district’s normal growth tax rate increase. Instead of asking for a 4-percent revenue increase, the district is seeking an additional nickel increase.

The nickel tax is placed on top of the existing tax and is specifically designated for district facilities. It can only be used to repair or build those facilities.

Every district gets to designate one nickel for that purpose. To receive additional nickels, as Boyle is doing and Danville is attempting to do, a school board can vote it in. There also are other ways districts can obtain those, such as sudden and large growth.

When boards vote in a nickel tax, it can potentially be recalled, or petitioned for removal, by taxpaying residents within 45 days. However, if the deadline passes without question, the additional nickels are matched, to an extent, by state funds.

“By doing it as a nickel tax, we trigger a state contribution,” said Danville Superintendent Keith Look.

Unfortunately, it is not a perfect match.

In Danville’s case, the state match would be about $2.2 million, Campbell said, and would give the district an estimated $7.7 million to renovate Hogsett and Jennie Rogers elementary schools.

“It’s been well beyond 20 years” since any of the district’s three elementary schools have been renovated, Campbell said. The Kentucky Department of Education recommends buildings be renovated every 20 years.

“We’ve known for years that our facilities needed attention. What we’ve been able to do for a long time is just patch things. Our facilities funds don’t come close to meeting the need,” said Harp. “In recent years, with the economy the way it's been and the state funding being a question mark, we’ve needed to use our general funds and make sure we were in a good place with them.”

Calling it “too much to ask” in the past, Harp said this year seemed to be the right time to push for the nickel tax as the board thought a general fund tax increase was not necessary.

“We’ve been trying for years to be frugal with our money,” he said. The nickel tax would allow the district to get beyond "patching."

The dire need of repairs to all of the elementary schools was one of the big concerns voiced by parents during last year’s discussions of the district’s pending facility restructuring plan, which is going to divide the three elementary schools by grade, not area. In the plan, Toliver Elementary, set to house the second- through fifth-grade students, was going to get the bulk of the district’s current bonding potential.

“We have the capacity to renovate and build the addition onto Toliver, but we still need to provide equivalent facilities for preschool, kindergarten and first grade,” said Look.

Toliver, as with the other two elementary schools in the district, has not had major improvements in more than 20 years, Campbell said.

Jennie Rogers will likely hold a kindergarten and first-grade center, while Hogsett would house the central office and the district preschool program. However, despite both of those schools needing repairs, according to teachers and parents, district officials stated they would not have the funds to repair those, too.

That is, unless the nickel tax passes, Campbell said.

“If we don’t (do the nickel tax), it will be 2030 or so before we would have bonding potential again. And we have Bate and the high school, too, that we would need to do something with at that point. If we wait until 2030, we would have more upgrades that would need to be done,” Campbell said.

The nickel tax is also the way most recommended by the state, said Harp.

“We’ve asked questions over and over, ‘Is there a different way to do this?’ Every time, we get the same answer, which is, really, the best way and the only way to address these buildings long term, is to do what we’re talking about doing now — to have that property tax increase that is earmarked and dedicated for building fund only,” Harp said.

Boyle County’s success in passing the tax is not the sole reason Danville decided to consider it, officials said.

“It reinforced for us that this is a community that really supports its schools,” Harp said. “People understand that we look over these things, we think them through, we’re not frivolous, we don’t just grab for money. We are trying to look out for kids’ needs. We feel like it's the right thing to do."

If the vote passes Monday, residents of the school’s taxing district would have until Oct. 1 to file a petition to recall the tax, Campbell said.

It is unknown at this time how many signatures would be needed, said Trille Bottom, Boyle County clerk.

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