Following the insistence of charter school leaders and some outspoken civic groups, the Kansas City school board on Wednesday voted unanimously to keep the district’s property tax rate as is.
As a result, because of Jackson County’s messy reappraisal that caused a huge jump in the value of many homes, property owners are expected to pay 23% more on average in school taxes in the coming year. Members of the board blamed “a failure of leadership” at the county level for any financial impact on families.
“To pit neighbors against their school district is utterly disgusting,” said Manny Abarca, the board’s treasurer. “We know where this anger should be directed, and that is at the county executive.”
Board members said their decision was a difficult one, but the district can’t afford to reduce the levy without hurting students. They said they are only trying to make up for low tax revenues during the Great Recession.
“Our first responsibility is to the education of the children in this district, and in order to do that it requires money,” said Pattie Mansur, school board president.
Kansas City Public Schools is the only district in the state not protected by Missouri’s Hancock Amendment — legislation that allows districts to raise their levies when property tax revenues plunge.
Roughly 30 years ago, when KCPS was made to spend billions in taxpayer dollars as part of a desegregation case, its tax levy was capped at about $4.96 per $100 of assessed valuation and hasn’t budged. At that rate, the owner of a home assessed at $100,000 will pay $952 in school property taxes. If 89% of taxes are collected, the district stands to gain $6.9 million over the amount it had budgeted.
Had the board reduced the levy even 7 cents, which was one option it had considered, that same homeowner would have paid $929 in school property taxes, and the district would have collected about $3.2 million over its budgeted amount.
District officials argue that from 2007 to 2017, assessed valuations were down along with property tax revenues, and KCPS lost about $147 million in revenues. Unlike other districts in the state, it could not make up any of that by raising its levy.
So this year, after the county adjusted property assessments in an attempt to find a more true value, the school district stands to see a boost in tax revenues of more than 23%, even though it had only budgeted for a 17% increase. The district built its 2019-2020 fiscal year budget on an assumed increase of $16 million of new revenue based on preliminary information it received in March from the county assessor.
The school district levy is roughly half of the total property tax bill. Local tax dollars make up roughly 79% of the district’s $258 million operating budget.
District leaders said some of the additional revenue will pay for roughly 10 more pre-K classrooms, which they had been planning on for several years.
Superintendent Mark Bedell, along with the leaders of 13 other area districts, did not support the effort this spring by former Mayor Sly James to fund pre-K expansion with a 3/8-cent sales tax. Critics argued that the tax would present a hardship on the poorest residents.
Instead, the district wanted to ask voters to approve a property tax levy to expand pre-K. But with this latest tax revenue increase, that won’t be necessary, said Linda Quinley, KCPS chief financial and operations officer.
In 2018, the assessed value of property in the district totaled $3.1 billion. That should grow to $4 billion in 2019, Quinley said. She said 1.71% goes to the county to help fund assessments. “And we estimate that 3.5% of that won’t be collected,” she said.
She also said that $85.3 million of those dollars represent new construction on which no taxes will be collected.
While it’s KCPS that collects the tax, about half goes to the 24 charter schools that are educating more than 47% of the public school students who live within district boundaries.
At Wednesday night’s meeting, Dean Johnson, executive director of Crossroads Academy charter school, said he was happy the board had voted to hold the levy at its current rate because charters need the money. “State funding to charter schools has gone down four straight years,” Johnson said.
But Charles O. Lona, who lives on Kansas City’s West Side, disagreed with the vote. “They are taking the whole windfall and I think that is unfair,” Lona said. “They are not taking into consideration the high financial impact it is going to have on residents. It’s a financial hardship, and it’s wrong.”
At a hearing Monday night on the plan, Luke Norris, a member of the board for Citizens of the World charter school, pleaded with the KCPS board to “hold the levy and not roll it back.”
In a letter to the school board, the Coalition for Kansas City Economic Development Reform — an alliance of community groups that functions as a watchdog over public resources — said it also is opposed “to any reduction in the Kansas City School District levy.”
“The problem with the property tax assessments rests with the County. The solution should too,” the letter said. “If certain properties were improperly assessed, that is a problem that should be rectified through the existing appeals process. The school district should not be expected to solve a problem it did not create.”
Only a dozen or so people attended the hearing. A few said that while they support the district’s need for money to educate Kansas City children, they wanted the district to keep in mind that if parents are forced out of homes because taxes are more than they can afford, that, too, hurts the children.
“I want them to roll the levy back to the 17% increase they had expected in the first place,” one woman said outside the hearing.
The coalition cited several reasons why the district needed to hold on to all the revenues it can. They pointed to the many tax abatements given to developers over years — tax money siphoned away from schools. They mentioned the millions of dollars worth of deferred maintenance that needs attention, including heating and cooling units, roofs and repairs to walls that allow water to seep into to buildings.
And they said, “Additional tax revenue could be spent improving salaries and benefits, which over time will enhance the desirability and livability of all Kansas City neighborhoods.”