Avenue City Elementary School

INCREASE IN ASSESSED VALUATION

DOESN’T MEAN MORE MONEY FOR SCHOOL DISTRICTS

by Superintendent Jerry Archer
This may be difficult to explain but I will do my best and if you have questions, please call. Since our assessed valuation increased substantially, I thought I would try to explain that this does not necessarily mean an increase in overall monies for the school district.  

Our assessed valuation did increase $ 1,376,129 (from $ 9,855,010 to $ 11,231,230) for the 2003-04 school year. The main reason for this was that Andrew County has been assessed below the 33.33% that is required by law and they were made to comply with the requirement. Even though Ron Christmas is the assessor now, his predecessor was the person who had to increase the assessed valuation for this requirement. Our school would have been able to receive more tax revenue if the assessed valuation had been increased small percentages along rather than a large percentage in one year. Schools are able to receive the consumer price index (which has been running between 3 & 4%). If schools receive more than that they have to roll the levy back in order to comply with the law. The assessed valuation increased 13.96% ($1,376,129 divided by $9,855,010) for the 2003-04 school year.

To explain the finances of this, when our assessed valuation increased $1,376,129, if all factors being the same, we would had to roll back our levy $.2475 (from $3.3559 to $3.1084). Since we had a $.18 voluntary rollback from the Prop C waiver that was passed a few years ago, the Board decided to add this to our levy. The State’s financial condition played heavily into this decision. Thus instead of our levy being $3.1084, it was set at $3.2884 for the 2003-04 school year. Below I will explain in the chart how this affected our State monies when the levy decreases:

1) State Monies that would have been collected with a $ 3.3559 levy =                                                          $155,142 (this is just showing line 1b) on the Foundation Formula – which is the line affected by this)

2) State Monies that would have been collected with a $ 3.1084 levy =                                                           $ 101,703

Decrease in state monies with increased assessed valuation by keeping the $ .18 rollback =                   $ 53,439

3) State Monies actually received when adding the $ .18 for a $ 3.2884 levy (as you can see our levy decreased from $ 3.3559 in 2002-03 to $ 3.2884 in 2003-04) =                                                                                                            $ 149,663

Decrease in state monies with increased assessed valuation when adding the $ .18 rollback to the levy = $ 5,479

Now to explain the additional local taxes we received from the taxpayer (this is not using the debt service levy of      $ .95 since we do not receive state monies from this levy):

1) Local tax monies we received during the 2002-03 school year =                                                                     $ 334,594

2) Local tax monies we expect to receive during the 2003-04 school year (with the $ .18 rollback added to levy for a total of$ 3.2884)                                                                                                                                                         = $ 361,941

Increase in local taxes with a $ 3.2884 levy for 2003-04 =                                                                                 $ 27,347

3) Local tax monies if we would not have added the $ .18 rollback to the levy making it $ 3.1084 =               $ 342,129

Increase in local taxes with a $ 3.1084 levy for 2003-04 =                                                                                  $ 7,535

To show the overall effect it has on our school district, I will subtract the decrease in state funds from the increase in local taxes:

1) Decrease in state monies if we would not have taken the $ .18 rollback (levy at $ 3.1084) =                       $ 53,439

2) Increase in local taxes with a $ 3.1084 levy =                                                                                                         $ 7,535

Difference in local tax increase and state monies decrease with a $ 3.1084 levy =                                    $ - 45,904

Decrease in state monies when we added the $ .18 rollback to the levy (levy at $ 3.2884 – this is the levy we have) = $ 5,479

4) Increase in local taxes with a $ 3.2884 levy =                                                                                                        $ 27,347

Difference in local tax increase and state monies decrease with a $ 3.2884 levy =                                     $ + 21,868

Thus you can see if we would not have increased our levy by taking the $ .18 rollback on the Prop C waiver, we would have lost $ 45,904 even with the assessed valuation increasing $ 1,376,129. We are thankful we did have the provision of the $ .18 rollback and thus increased our overall revenue $ 21, 868, but as you can see this even caused us to lose state monies because our levy decreased 6.75 cents. As I said at the beginning, this is probably confusing but hope you realize that even though your assessed valuation increases it does not necessarily mean that the school receives extra monies. Again if you have a question on this, please let me know.

Home