For the fourth year in a row, Covington Independent Schools will not increase the district's property-tax rate.
Although they could have increased the rate by up to 4 percent, board members for the district on Aug. 26 voted unanimously to take the minimum compensating tax.
“I think it means that we are really being very efficient in our use of taxpayers’ money,” said Superintendent Alvin Garrison. “I also think it’s great leadership from our board that they voted to do this.”
Board members were able to avoid raising taxes because of rollbacks on Covington’s Internal Revenue Service building and two or three other properties in the area. The rollbacks ensure “more people have a piece of the pie,” said Finance Director Annette Bemerer.
According to the Free Dictionary, a rollback is a retroactive claim for a higher property-tax rate, which goes into effect when the property is sold or put to a higher use than that for which it was assessed. “We’re actually giving [taxpayers] a tax cut now that companies are coming back on board and having to pay the full rate of taxes,” Bemerer said.
The real property-tax rate, which covers real estate, will decrease from 113.2 cents to 111.1 cents per $100 assessed valuation. The property-tax rate for tangible property other than real estate will increase from 115.6 cents to 115.7 cents per $100 valuation.
The owner of a $65,000 home — which Bemerer said most accurately reflects the average cost of a home in Covington — paid $736 in real property taxes last year. Under the new rate, that homeowner will pay $722 annually, Bemerer said.
The new tax rate is expected to generate $16.8 million for the district, but she said the district likely will receive less than that: The tax-revenue estimate, provided by the Kentucky Department of Education, is based on 100 percent tax collection, she said. “It depends on our taxpayers — if everyone pays their tax bills.”
While the decreased tax rates are due largely to rollbacks, the district’s budget committee also worked to make it possible, Bemerer said. The committee, which includes Bemerer, two board members and other district personnel, looks at the district’s expenses and weighs wants versus needs.
“If we’re good stewards of our money, if we have some extra money that we didn’t spend, that helps out the next year’s general fund,” Bemerer said.
Covington Independent isn't alone among Kentucky's urban school districts in passing on the benefits of higher property assessments to property owners. Just east across the Licking River in Campbell County, Newport Independent Schools once again will not take the 4 percent rate increase to which it's entitled.
The district can thank a $28 million increase in the citywide property assessments for generating more revenue.
"We will not be raising tax rates," said Finance Director Tete Turner. "They will be reduced, it's just a matter of how much."
Newport Independent's board is expected to set the new rate at its Sept. 23 meeting.
In the commonwealth's largest city, Jefferson County Public Schools also will keep its tax rate the same — 71 cents per $100 of valuation for real property and personal property. The district serves Louisville.
Some of Northern Kentucky's smaller river-city districts don't have the financial flexibility to keep tax rates steady. In Bellevue Independent Schools, for example, the school board voted to take the full 4 percent it was allowed. "It's a much smaller district, so the revenue generated from that is minimal," said Superintendent Robb Smith.
"No board of education likes to increase any sort of tax ever, but it becomes necessary in the climate the school boards are facing," he added.
In Lexington, Fayette County Public Schools also chose to raise the property-tax rate there by 4 percent.