Request By:
Mr. Faurest Coogle
Superintendent, Franklin County Public Schools
916 East Main Street
P. O. Box 980
Frankfort, Kentucky 40602
Opinion
Opinion By: Frederic J. Cowan, Attorney General; Anne Keating, Assistant Attorney General
In your recent letter you requested an Opinion of the Attorney General interpreting KRS 157.620(1) of the 1990 Regular Session House Bill 940 on school district participation in the school construction funding program. Your particular question concerns whether the Franklin County Board of Education, which has an equivalent tax rate of 36.2 cents, is required to levy an additional 5 cents tax for commitment to debt service, new facilities or major renovations of existing school facilities.
The Kentucky Department of Education has issued a general policy statement and has verbally informed you that an additional 5 cents tax rate must be levied by Franklin County regardless of the existing equivalent tax rate of 36.2 cents. Mr. W. J. Barwick, Executive Director of the School Facility Construction Commission, has issued a general memorandum and has verbally informed you that 5 cents of the existing 36.2 cents equivalent tax rate may be committed to qualify for participation in the school construction program without an additional levy of 5 cents beyond your present equivalent tax rate. You seek resolution of the conflict between the opinions that you have received from the Kentucky Department of Education and the School Facility Construction Commission.
To understand KRS 157.620, as amended, it is helpful, first, to examine two other statutes. KRS 160.470(12)(a), as amended, states, in pertinent part:
Notwithstanding any statutory provisions to the contrary, effective for school years beginning after June 30, 1990, the board of education of each school district shall levy a minimum equivalent tax rate of thirty cents (30 cents) for general school purposes. Equivalent tax rate is defined as the rate which results when the income collected during the prior year from all taxes levied by the district for school purposes is divided by the total assessed value of property plus the assessment for motor vehicles certified by the revenue cabinet.
Section 105 of Act of April 11, 1990, Chapter 476, 1990 Advance Legislative Service 1626 at 1629 amending KRS 160.470.
KRS 157.615(5), as amended, defines "equivalent tax rate" for purposes of participation in the school construction program as:
the rate which results when the income from all taxes levied by the district for school purposes is divided by the total assessed value of property plus the assessment for motor vehicles certified by the revenue cabinet as provided by KRS 160.470. The amount of income from any voted building tax shall be included in computing the equivalent tax rate . [Emphasis added.]
Section 192(5) of Act of April 11, 1990, Chapter 476, 1990 Advance Legislative Service 1667 amending KRS 157.615.
KRS 157.620(1) has been amended to require of each district that:
[In order to] participate in the school construction funding program, the district must have unmet needs as defined by KRS 157.615 1 and must meet the following eligibility criteria:
(a) Commit at least an equivalent tax rate of five cents (5 cents) to debt service, new facilities or major renovations of existing school facilities. The five cents (5 cents) shall be in addition to the thirty cents (30 cents) required by KRS 160.470(12). If the current levy of a district exceeds the required thirty cents (30 cents) and the five cents (5 cents), no additional tax shall be required. However, not less than five cents (5 cents) shall be committed under this subsection.
Section 193(1)(a) of Act of April 11, 1990, Chapter 476, 1990 Advance Legislative Service 1666 amending KRS 157.620.
The Kentucky Department of Education policy statement on levy of building taxes provides that districts that presently levy a 5 cents or greater special voted building fund tax are automatically eligible to participate in the school construction fund and need not levy an additional tax. Any district that does not have a building fund tax must levy a minimal 5 cents equivalent building fund tax in order to be eligible to participate in the program regardless of its present equivalent tax levy. See Attachment A.
In a memorandum to board members issued on May 15, 1990, Executive Director W. J. Barwick of the School Facility Construction Commission informed the boards of education that each district should levy a minimum equivalent tax rate of 30 cents for general school purposes and then set forth the language of KRS 157.620(1)(a) on requirements to participate in the School Construction Funding program. See Attachment B.
By October 1, 1989 the Franklin County Board of Education set an equivalent tax rate of 26.6 cents of property tax and 9.6 cents of utility taxes for the 1990-1991 school year. The income was applied for general school purposes, including debt service on construction, but the County did not have a separate voted building tax. It is the position of the Franklin County School System that, under the language of KRS 157.620, as the County's current levy of 36.2 cents exceeds the required minimum equivalent tax rate of 30 cents, and the 5 cents required to participate in the school construction program, no additional tax shall be required.
In looking at the statutory language of KRS 160.470 and KRS 157.615 - .620, it is the opinion of this office that the plain language of KRS 157.620(1)(a) permits any district which has a current levy exceeding the required 30 cents and the 5 cents not to levy an additional tax. This view is supported by the other statutes quoted above. In KRS 160.470(12)(a) first the equivalent tax rate is clearly defined as a rate based on income collected during the prior year from all taxes levied by the district for school purposes divided by assessments of property. Note that this definition of equivalent tax rate focuses on how the rate is set -- not on the source of the tax levy. Second, according to the same statute, after June 30, 1990 , each board of education is to levy a minimum equivalent tax rate of 30 cents for "general school purposes." [Emphasis added.]
According to KRS 157.620 as amended, which went into effect on July 13, 1990, each district that wishes to participate in the school construction funding program is to commit at least an equivalent tax rate of 5 cents to debt service, new facilities or major renovations in addition to the 30 cents required for general school purposes. This commitment has to do with the designation of the tax and consequent expenditures after July 13, 1990 and that view is emphasized by the language " if the current levy of a district exceeds the required 30 cents and the 5 cents, no additional tax shall be required." [Emphasis added.] Section 193(1)(a) of Act of April 11, 1990, Chapter 476, 1990 Advance Legislative Service 1666 amending KRS 157.620.
Accordingly, it is the opinion of this office that the plain language of the statute permits Franklin County prospectively to commit 5 cents of the 36.2 cents equivalent tax rate now in effect for debt service, new facilities or major renovations of existing school facilities in order to qualify to participate in the school construction funding program. This is true regardless of the fact that in the past the district may not have had a voted building tax.
Attachment A
POLICY STATEMENT
V. DEBT SERVICE EQUALIZATION
A. Levy Provisions: Districts presently levying a 5 cents or greater (per 100 dollars of assessed valuation) special voted building fund are automatically eligible to participate and are not required additional Levy. Districts that do not have a building fund tax levy must levy a 5 cents equivalent buildng fund tax to establish eligibility for participation regardless of their present equivalent tax levy.
B. Participation: No district will receive funds until such time as the full 5 cents is committed to outstanding debt service or bonds are sold which would commit the full 5 cents to debt service. The debt service of the district that is outstanding is that amount of debt service in excess of eighty percent of the SEEK capital outlay component. ($ 100 per A.A.D.A.)
C. Calculation: $ 225,000 x .0005 = $ 112.50 maximum eligibility. District per pupil assessment x .0005 = dollar amount of the $ 112.50 to be supported by the district and is substracted from the $ 112.50 maximum eligibility.
Attachment B
SCHOOL FACILITY CONSTRUCTION COMMISSION
MEMORANDUM TO BOARD MEMBERS
FROM: W. J. Barwick, Executive Director School Facility Construction Commission
Effective for the school years beginning after June 30, 1990, the board of education of each local district shall levy a minimum equivalent tax rate of thirty cents (30 cents) for general school purposes.
KRS 157.620(1): To participate in the school construction funding program, the district must have unmet needs as defined by KRS 157.615 and must meet the following eligibility criteria:
(a) Commit at least an equivalent tax rate of five cents (5 cents) to debt service, new facilities or major renovations of existing school facilities. The five cents (5 cents) shall be in addition to the thirty cents (30 cents) required by KRS 160.470(12). If the current levy of a district exceeds the required thirty cents (30 cents) and the five cents (5 cents), no additional tax shall be required. However, not less than five cents (5 cents) shall be committed under this section.
Please contact me at 502/564-5582 if you have questions concerning the offer of assistance or the eligibility criteria established by the Education Reform Act.
Footnotes
Footnotes
1 "Unmet needs" are the cost of new construction and renovations minus available local revenue. Section 192 of Act of April 11, 1990, Chapter 476, 1990 Advance Legislative Service 1667 amending KRS 157.615.