Officials now expect deeper decrease to property tax rate in Lawrence school district
photo by: Nick Krug
The Lawrence school board approved Monday a 2018-2019 budget for publication that reduces the mill levy by 1.324 mills.
The published budget establishes maximum 2018-2019 total district expenditures at $170.8 million. The published budget also establishes a 54.626 mill levy, which will raise $63.39 million in property tax revenue in 2018-2019 for the district. At 54.626 mills, the district’s share of taxes on a $175,000 home is $1,053.
The 1.324-mill reduction in the district’s overall mill levy was bigger than financial director Kathy Johnson estimated at the July 23 school board meeting.
“I was projecting about a 0.9-mill decrease when I talked to you last week, before I worked through all the particulars,” she said.
The district benefited from about $4.8 million in new state funding from the school finance formula the Kansas Legislature passed this spring, which increased base state aid per pupil from $4,006 to $4,165. The Kansas Supreme Court ruled in June that the new formula doesn’t adequately fund K-12 education as the state constitution requires, but it said that the shortfall could be addressed in the 2019 legislative session.
The new formula did make changes to the way school districts calculate local option budgets, and that change was to the advantage of Lawrence school district taxpayers and accounted for the overall mill levy decrease in the published budget. The state allows local school boards to approve local option budgets to supplement state general fund dollars. The Lawrence district’s local option budget is 33 percent of per-pupil aid it receives from the state.
Johnson said the district local option budget in the published budget will require 14.75 mills of property tax support (down from 16.702 mills in 2017-2018), which will raise $17.38 million in the coming school year.
Johnson said the district’s bond-and-interest fund mill levy would increase 0.549 mills to 10.984 mills in 2018-2019. The increase is needed to cover the cost of the sale this fall of $43.5 million in bonds from the $87 million bond referendum voters approved in May 2017 (the district sold the first $43.5 million of bonds from the referendum in September 2017).
During the May 2017 bond referendum campaign, district advocates said that the $87 million in new debt would require 2.4 mills in additional property tax support, Johnson said. The district did better than that campaign estimate and will increase the bond-and-interest mill levy by 1.484 mills to finance the bond issue, she said.
The one red flag Johnson raised throughout the budget discussions of the past three months was the use of its reserves the past four years to compensate for state funding cuts. As a consequence, the district’s contingency reserve has shrunk from $6.47 million in 2014 to an estimated $2.4 million currently. Even with the added state money, the district will use $1.4 million in contingency reserve money in 2018-2019.
Superintendent Anthony Lewis referenced that deficit spending when commenting on the published budget.
“The community charges us to be fiscally responsible,” he said. “That (deficit spending) is something we are working on.”
With its vote to publish the 2018-2019 budget in the Journal-World, the school board also scheduled a public hearing on the document for 7 p.m. Aug. 13 at the district office, 110 McDonald Drive. The board will consider final adoption of the budget after the public hearing.