By Megan Harris

HARTFORD — Board members representing Ohio County Public Schools face tough tax decisions this month as they attempt to retain their 45.1-cent general fund tax levy on real and personal property.

Jason Chinn, property evaluation administrator with the county, and Brian Decker, the district's finance director, outlined the problem to board members Dwight Raymond, Jay Raymond and Jeff Evans on Saturday at an early morning special called meeting at the school board's Hartford office. No action was taken.

The Board of Education met to review their options, which include retaining the 45.1-cent rate or reducing the levy to 42.8 cents, the maximum the board can impose without being subject to possible public recall at the November election.

Kentucky Revised Statute 160.470 states that general tax levies may produce no more than 4 percent more than the amount of revenue produced by the compensating tax rate — 41 cents for Ohio County Public Schools — from the district's previous fiscal year. When applied to the current year's property assessment, excluding new property, a compensating rate produces revenue equal to that produced the preceding year.

At the higher rate, Decker said, the district will lose an estimated $238,211 from funds available in 2011. Levying 42.8 cents will result in an estimated loss of $469,875.

Chinn and Decker said deficits stem from a $70 reduction in per-child state Support Education Excellence in Kentucky (SEEK) funding as well as dramatic jumps in county property value, including $68 million more in assessed unmined coal reserves. SEEK losses, totaling approximately $659,000 district-wide, are tempered by the increase in taxable property value, said Superintendent Scott Lewis, but "it's a flawed system."

"We don't get back enough in local taxes to cover what we lose every time the state drops our SEEK funding," he said Monday. "Everything, all our programs, it all goes back to our SEEK dollars. No matter which route we take, we're still going to be short money from the previous year. This is just a matter of lessening the blow."

As real and personal property values rise, Kentucky school districts receive an increase in tax revenue that fiscal year, but lose out on state aid the following year. In a perfect world, Lewis said, local taxes would compensate, bearing any additional burden.

"But it doesn't work if KDE keeps dropping our funding every year. If the state would start funding us better," Lewis said during Saturday's meeting, trailing off. "I just don't know, it's bad. This is a first for me, a first for our board. That's why I wanted us to sit down and understand for sure what we're looking at. I'm not sure yet what we're going to do."

An increase in the property tax rate is usually a district's only option to increase funding for educational programs, Decker said, but Ohio County may not have that option.

If the board retains the 45.1-cent rate, citizens have up to 45 days to file a petition from the date the rate is levied to recall 2.3 cents. The county clerk has 30 days from the date the petition is filed to verify it. Any petition challenging the clerk's determination must be filed within the subsequent 10 days. Should the clerk's findings be challenged, the matter would then fall to Circuit Court for final review within 10 days. 

The election, which must be paid for by the school district, may not be held less than 35 days or more than 45 days from the date the petition is validated. An election is only held if a petition is made.

But if voters approve the tax, and the Board of Education successfully retains the 45.1-cent rate, filing deadlines would still push tax collection into March when Chinn said citizens are far less likely to pay in as required. 

In 2011, Ohio County collected more than $4.6 million with the 45.1-cent levy -- the lowest tax rate of any surrounding district, Decker said, except for Butler County. 

"We've tried to save some money here and there, not replacing some people who left this year," Lewis said after the meeting. "We're not going to start telling people we're laying them off. We can't.

"Really, at this point, we're not sure what to do. There is no silver lining."