Letter to the Editor

Date: August 6, 2014

To the Editor:

As the end of summer approaches and the beginning of the school year nears, I would like to take this opportunity to provide important information to the patrons of our District regarding the financial outlook for the 2014-2015 year and the upcoming "Tax Rate Hearing" (scheduled for Tuesday, August 19th @ 5:15 pm).

After two years of growth in our assessed valuation(property values), we experienced a decline this year. The 2014-2015 assessed valuation for the district is $93,692,610 which is a decrease of $699,525 below the 2013-2014 assessed valuation of $94,392,135.

At our current tax rate levy, the decrease in assessed valuation will result in a loss of $24,483 in local tax revenue for the operating levy and $4,897 in local tax revenue for the debt service levy, for a total decrease of $29,380 for the 2014-2015 school year.

The state tax rate ceiling for the debt service levy came to $1.1962 per $100 of assessed valuation. The figure of $1.1962 would allow the district to fulfill its debt obligations for the year, as well as build a reserve with at least one year of debt service payments. Fortunately, the district has adequate balances in our debt service account and does not need to levy the full amount of the tax rate ceiling. With that being said, I am going to recommend to the Kennett #39 Board of Education we keep the debt service levy at $.70 CENTS per $100 of assessed valuation for the 2014-2015 school year. Setting the levy at $.70 will generate a large portion of revenue to meet our debt obligations, keep our promise to the patrons from the 2013 "no tax increase" bond issue and only reduce the debt service balances a minimal amount.

However, if we continue to see a decrease in assessed valuation in the future, we will have no choice but to recommend an increase in our debt service levy, in order to meet our debt obligations and not deplete our debt service balances.

The state tax rate ceiling for the operating levy came to $3.5361 per $100 of assessed valuation. The District currently has an operating levy of $3.50 per $100 of assessed valuation. Every year since 2008, we have rolled back our operating levy to $3.50 from the state tax rate ceiling amount in order to keep the increases at a minimal for the patrons. With that being said, I am recommending that we once again roll back the operating levy to the current level of $3.50.

As a district, we continue to experience the issue of the Funding Formula being under funded by the Missouri Department of Secondary and Elementary Education (DESE) as a result of the economic status of the nation and state. If the foundation formula were fully funded, we would receive an additional $600,000 per year in revenue from the state.

Governor Nixon announced in June that he will withhold $144 million from the state's school foundation formula. This preemptive move is made as a worst-case scenario in the event the Missouri General Assembly votes to override his veto of 10 tax break bills when they return in September for their annual veto session. The withholdings of the funding formula money is a possible loss of approximately $200,000 for our district. The 10 tax break bills which would affect our Proposition C or Sales Tax revenue has a possible loss of $215,000 to the district as well.

In closing, as a district we continue to strive to provide a quality education for our students with the least amount of financial responsibility being placed on the patrons of the district.

If you have questions or comments regarding the tax rate hearing, please contact me at your convenience at 573-717-1100 or cwilson@kennett.k12.mo.us

Sincerely,

Chris Wilson, Superintendent

Kennett #39 School District