School Board Faces Two Options for Local Revenue
Financial Adviser Presents Scenarios for Property Tax Rate
After historic growth in local home values, Fayette County Board of Education members are weighing two options for local property tax rates that could have a significant impact on addressing the district’s construction and renovation needs.
Every year, school boards in Kentucky are required to set local property tax rates that generate revenue to fund their public schools. This is a routine matter that happens each August, and the choice board members face is based on the total value of property in their county.
For the 2021-22 fiscal year, homeowners in Fayette County paid property taxes of 80.8 cents per $100 of assessed value.
During our Aug. 29 regular monthly school board meeting, the Fayette board’s financial adviser – Compass Municipal Advisors, LLC, – presented two possible options for the 2022-23 fiscal year:
- Under Option #1, the rate would go from 80.8 cents to 78.5 cents per $100 of assessed value.
- Under Option #2, the rate would go from 80.8 cents to 83.3 cents per $100 of assessed value.
Both options would provide revenue for the general operation of the district. Option #2 would also add a dedicated revenue stream for construction and renovation.
Here are the details:
- With Option #1, the district would have $188.5 million in bonding capacity right now and another $48.5 million over the next five years. After that, the district could not finance any additional projects until 2037. Option #1 provides enough to complete about three projects immediately.
- With Option #2, the board would have $540 million immediately available to borrow for construction and renovation projects, and continuous facility funding through 2037 and beyond. Option #2 provides enough to complete about 12 projects immediately.
The District Facility Plan, which was developed by a committee of stakeholders and approved by the school board, lists all the current construction and renovation needs for Fayette County Public Schools. The school board determines the order in which projects are completed.
Option #1 would save the owner of a $100,000 home $23 this year compared with 2021. Option #2 would cost the owner of a $100,000 home $25 more this year compared with 2021.
No decision was made at the Aug. 29 meeting, which was the board’s first opportunity to hear the presentation from the financial adviser and ask questions.
Contact: District spokeswoman Lisa Deffendall, (859) 699-1441
Revised Sept. 7 & 1; posted Aug. 29, 2022