School Comments By Dr. Robert Mayer The method by which schools are funded has changed significantly since 1997. The new school funding formula began in January 1997 and it is much different than in previous years. The old formula allowed schools to raise property taxes within certain limits if more money was needed. This practice is no longer possible.
In order to determine how much money the school receives in its general fund from property taxes and state aid, a formula is used. First, the school's average daily membership (ADM) is calculated. This figure is similar to the enrollment. State government then determines a per student cost figure, $3,540 for 1998-99. The ADM (1441) is multiplied by the $3,540=$5,101,140 for the Vermillion School District. This figure is the amount of money we receive from property taxes and state aid. The school board cannot increase that figure. There are additional funds from other non-tax sources.
Property taxes comprise $2,817,500 of the $5,101,140. State aid comprises $2,283,640. In order to determine how property taxes are calculated, the state government sets levies and these levies are applied to the district's taxable valuation which is approximately $279,000,000. The levies per each thousand dollars of assessed value are $4.71 agricultural property, $7.61 owner occupied property, and $16.25 commercial property. The school cannot raise these levies and the school cannot increase the taxable valuation.
Questions that exist concern the reassessment of property. What will happen to property taxes? Will taxes increase? The answer depends upon what the state government does with the levies. If the levies decrease, then taxes will either stay the same or the increase will be small. If the levies stay the same, taxes will increase. If taxes increase, will the school receive some of that increase? The answer is yes, but total school money will not increase because the state will reduce its share of the funding equivalent to whatever the increase is in property taxes. Confused?
In summary, schools cannot raise property taxes in the general fund (77% of total budget) and the special education fund (12%) of the total. Taxes can be increased in the capital outlay fund but only to the maximum mill levy of $3 per thousand dollars of assessed value. Please call if you have any questions on your taxes relevant to school funding. 677-7000.
The tax figures used in the article are the budget figures for 1998-99. Actual taxes collected may be different from the budgeted amount.