Swedeborg proposes tax increase to get more state funds
By: Darrell Todd Maurina
Posted: Wednesday, November 12, 2008 11:46 am
SWEDEBORG, Mo. (Nov. 12, 2008) — Members of the Swedeborg R-III School Board voted Monday night to ask voters in a special February election to approve a 36 percent property tax increase from the current tax levy. That would raise the authorized tax levy from $2.75 to $3.74 per $100 of assessed valuation; the cost to put the question on the February ballot will be about $3,500, District Administrator Ryan Warnol said.
However, Warnol told board members that the intent is to roll back much of the authorized increase and simply meet a state requirement that local property tax levies comply with a state minimum of $3.43 to receive the district’s full share of state taxes.
That’s much higher than most other area districts, which generally levy $2.75 per $100 of assessed valuation. State law sets $2.75 as the minimum property tax allowed for school districts. However, the state’s funding formula provides additional funds for districts that show a local tax effort that reaches what state officials consider an appropriate level of $3.43.
“Under the new formula, in order to receive full funding, we need to have a tax levy of $3.43. Basically they are shortchanging the majority of districts in this state since only a few have that $3.43 levy,” Warnol said.
A complication, Warnol noted, is that the actual property tax rate varies from year to year since under state law, the tax rate is rolled back by state authorities if it would result in a school district, city, or other taxing entity getting more new money than the annual cost-of-living increase. That means even if voters approve a $3.43 levy, it would be reduced in future years if property values in Swedeborg grow more than the inflation rate, and the school district would lose its share of extra state funds as a result once the levy drops below $3.43 per $100 of assessed valuation.
“The bottom line is we have to hit that mark,” Warnol said. “We could ask for more in order to be sure we get $3.43 if it is rolled back. We want to do this so we have minimal impact for our local taxpayers while preserving our access to these $5 million of state funds for small schools … If we could do this with no increase in the local tax assessment, that would be fine for me, but unfortunately that’s not what the state law allows.”
Tax increases are rarely popular, and that’s especially true for small rural districts like Swedeborg that no longer have any strong local businesses. Swedeborg closed its high school decades ago and local students attend Richland, Crocker or Waynesville for classes after their eighth-grade graduation.
However, Board President Chris Black supported the tax proposal.
“I know it’s just estimates, shooting in the dark, but hitting that $3.43 may entitle us to $20,000 of that $5 million for small districts,” Black said.
“The impact on our people is minimal, but for the district it is huge to have access to these funds,” Warnol said. “We definitely need to explain this to the public and have a meeting before this goes on the ballot.”
Swedeborg is the county’s smallest school district and for the current school year had an annual budget of $689,000. The budget for next year proposed by Warnol is $706,000, with raw revenues up by about $17,000, mostly through state funds.
While the vote was unanimous, some board members said they weren’t optimistic the proposal would pass with the voters.
“I have a hard time seeing this going. Times are tight right now,” said board member Lucas Gibson. “If we put this on the ballot, it should be stated on the ballot that we would roll it back.”
Members of school boards, city councils and other tax districts have the right to roll back tax levies approved by voters at their annual tax rate hearing, though that rarely happens and tax rate hearings usually have few people attending. That could change if Swedeborg voters approve a 99-cent increase to $3.74 with the understanding that board members will roll it back each year to $3.43, district leaders said.
“It doesn’t help us to go over than $3.43 mark anyway; we need to explain that in the public meeting,” said board member Alexis Roam.
“We need to have a town hall meeting and advertise it on the radio and everywhere. We need to let people know what we are doing,” said board member Joe Cargill.
Black supported the proposal but worried that voters might react negatively to a permanent tax increase rather than one which would be for only a limited period to pay off a construction bond or a similar project.
“Is this open ended on time? Will this carry on from now until eternity?” Black asked.
“Yes, it is, and we have to have it in order to get that state funding,” said board member Jaime Alexander.
“I don’t want the public to think that we’re going to get comfortable with this amount of money and never lift this burden on our people,” Black said. “Other districts do operate now without that state funding. I would hate to miss out on it, but I do think there is going to be a burden placed on our taxpayers … but I don’t want to continue to do stress management, year after year trying to decide if we will have enough money to operate.”
The proposal to put the tax increase on the February ballot passed unanimously. Even though two board members were absent, Black said the two absent members, Greg Black and Wayne King, both supported the proposal as well.