JCPS needs 4 percent property tax revenue increase in order to b - WDRB 41 Louisville News

JCPS needs 4 percent property tax revenue increase in order to balance $1.4 billion budget

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Budget discussion during the Jefferson County Board of Education meeting on May 26, 2015 (photo by Toni Konz, WDRB News) Budget discussion during the Jefferson County Board of Education meeting on May 26, 2015 (photo by Toni Konz, WDRB News)
JCPS Chief Financial Officer Cordelia Hardin talks to school board members about the 2015-16 budget (Photo by Toni Konz, WDRB News) JCPS Chief Financial Officer Cordelia Hardin talks to school board members about the 2015-16 budget (Photo by Toni Konz, WDRB News)
LOUISVILLE, Ky. (WDRB) -- The Jefferson County Board of Education may need to seek a 4 percent property tax revenue increase later this summer in order to balance its $1.4 billion budget for the 2015-16 year, according to a tentative budget approved by the board on Monday night.

Cordelia Hardin, chief financial officer for Jefferson County Public Schools, said the district won't officially ask or advertise for any increase until August, but that the $16 million generated from the increase would help make up for an approximate $24 million shortfall between state-mandated pay raises and the actual amount of funding it will get from the state. 

"It's possible that if property assessments go up, the tax rate could go down, but we won't know that until the end of July," she said. "And right now, we have to balance our budget and we have to do that by making some assumptions that are based on the unknown."

Aside from seeking a potential tax increase, JCPS would also need to pull $10 million from its emergency fund, Hardin said. That would leave the district with about $93 million in its contingency fund, she said.

The school board voted 5-1 to approve the tentative budget, which starts July 1, with board member Stephanie Horne voting against it. Board member Diane Porter was absent from the meeting.

Horne said she voted against the budget because she didn't see some of the big changes she wanted to see, such as more funding for pre-kindergarten, and because she didn't want property owners to assume that there would be a tax hike.

"That hasn't been determined yet, we won't know if there will need to be a tax increase," she said. "It seems premature to mention it to me."

The district's current tax rate is 71 cents per $100 of assessed value, which means the owner of a $100,000 home currently pays about $710 in property taxes to JCPS. 

Property owners in Jefferson County have seen their school tax rates steadily climb over the last decade. In 2004-05, the owner of a $100,000 home would have paid the school district $592 in property taxes -- $124 less than what the current rate yields. That equates to a 21 percent increase over the past 10 years.

Last year, Superintendent Donna Hargens ultimately decided not to ask the school board for a tax increase, despite the district advertising the potential for one.

Under state law, a taxing district can adjust its rate annually, but the new rate cannot result in its revenue increasing by more than 4 percent. Any increase exceeding 4 percent requires a petition that puts the increase up for a referendum.

PREVIOUS | KONZ | A look at JCPS' $1.4 billion budget - how is the money spent?

The $1.4 billion budget, which will start July 1, includes a general fund of $1.1 billion.

Hargens told board members Monday night that she decided against a plan she had that would have cut two work days for year-round employees in 2015-16. Earlier this year, Hargens said the salaries of 260-day employees would not be cut, but that they will not work, nor get paid, for the additional two days that are included in the 2016 fiscal year calendar. That would have saved the district $600,000 annually.

Overall, approximately $810 million of the general fund -- or approximately 70 -- of the district's budget goes directly to schools. About 26 percent (about $295 million) goes to school support, which includes transportation, special education teachers and support personnel and the remaining 4 percent (about $45 million) goes to business offices, which includes finance, human resources and the central office.

Aside from property taxes, JCPS gets about $26 million in motor vehicle taxes each year, as well as $134 million in occupational taxes deducted from the paychecks of workers in Jefferson County.

Reporter Antoinette Konz can be reached at 585-0839 or @tkonz on Twitter.

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