If voters decide to build new elementary and high schools for USD 257, construction will be funded by myriad ways.
Of utmost advantage would be state funding of 51 percent. Beyond that, district residents would pay a property tax levy and a quarter-cent sales tax would be levied.
Both the property and sales tax issue will be on the Nov. 3 ballot. Both must pass for the go-ahead.
The price tag for the new school campus north of town is $50 million. The 95-acre site is just north of Oregon Road. The land would cost $521,000. The site straddles the Prairie Spirit Trail. The elementary complex would be to the west of the rail trail; the high school to the east. Practice fields, parking and other support areas would be a part of the campus. The middle school, completely remodeled 20 years ago and considered the district’s fittest facility, would have upgrades costing $1 million.
When interest, conservatively expected to be accrued annually at a rate of 2.5 percent, is added, total project cost for the 30-year life of the issue would be $87.18 million. State aid would retire $44.5 million of the total leaving a little less than $43 million to paid out over 30 years through the property and sales taxes.
The state aid is not a sure thing in future years. This year’s Legislature removed the funding only to reinstate it at the last minute.
If the district’s share were paid with property taxes only, the annual assessment would be 21.66 mills. However, the 1/4-cent sales tax contribution is figured to be worth 4.47 mills a year, lowering the property tax assessment to 17.19 mills.
When the Legislature approved an increase in local option budget (LOB) funding earlier this year, it lowered local property tax burdens. In USD 257’s case that was 10 mills, leaving the net levy increase for new schools at 7.19 mills. The LOB provides money for general operation of schools, that as with the general fund.
However, when school officials figured their budget for 2015, they added 2 mills to the capital outlay fund, proceeds of which may be used for physical needs and some equipment purchases. That was done, Superintendent of Schools Jack Koehn pointed out, to provide money to deal with problem areas if the new schools issue failed.
“We have every intention of lowering the capital outlay levy by 2 mills next year if the bond issue passes,” he said.
The 8-mill capital outlay levy would leave the overall adjusted mill levy increase in 2015-16 at 9.19 mills with new schools, and at 7.19 mills with a 2-mill decrease in the capital outlay fund levy beyond next school year.
ALL THOSE numbers may seem bewildering. Let’s look at the two local taxing components individually and put them in simple terms.
Property taxes are paid according to what real property — buildings and land — is worth, based on formulas that determine market, or appraised, value which leads to assessed value for tax purposes.
Market value of residential, commercial and industrial property is determined mainly by comparisons with similar properties that have sold and by improvements made. Farm land is appraised under a formula, called use-value, that takes into account such things as soil type and crop outcomes and prices.
As an example for residential property, a house in Iola is appraised by comparing its size and accommodations to others that are similar and what they brought at sale.
If a house is appraised at $100,000, it then is assessed, for taxing purposes, at 11.5 percent. Consequently the assessed value is $11,500.
A mill is one-tenth of cent, meaning, a levy of 1 mill raises $11.50 from the assessed value of the above mentioned house, or $105.69 for 9.19 mills to support construction of new USD 257 schools. That figures out to $8.81 a month, or 29 cents a day.
While residential property is assessed at 11.5 percent, commercial, industrial and farm buildings are assessed at 25 percent. Farm land is assessed at 30 percent of use-value.
The sale tax issue is another matter.
While the bond issue per se will be decided by all residents of USD 257, the fate of a half-cent sales tax issue will be determined by Iola residents.
When the district decided to go ahead with the school construction issue, Iola was asked to participate with a 30-year sales tax. Council members agreed, but made the issue half a cent, rather than the quarter cent the district sought. The second quarter cent — each quarter will raise about $300,000 a year — would be used for infrastructure improvements throughout the city, including some that would be necessary to support construction of the new schools.
For perspective, a half-cent in sales tax would mean an additional 50 cents for a $100 purchase; it would add $5 to purchase of a $1,000 refrigerator, $100 to the purchase of a $20,000 vehicle.
The half cent would raise Iola’s overall sales tax to 8.9 percent, the same of that in Parsons and Pittsburg. Humboldt and Fort Scott are at 8.65 percent, while Chanute is 8.4 percent.