702 KAR 3:275.
School district tax rate formulas.
RELATES TO: KRS
132.010, 134.590, 157.440, 157.620, 157.621, 160.470, 160.473, 160.476, 160.477
STATUTORY
AUTHORITY: KRS 156.070, 156.160
NECESSITY,
FUNCTION, AND CONFORMITY: KRS 156.070 sets forth the State Board for Elementary
and Secondary Education's plenary powers over the management and control of
local school districts. KRS 156.160 gives the State Board for Elementary and
Secondary Education the authority to promulgate administrative regulations deemed
necessary for the management of the school districts under its control. This
administrative regulation is necessary to provide guidelines for the
calculation of the tax rates certified to the school districts by the
Department of Education.
Section 1.
Definitions. (1) "Current year total valuation of adjusted property at
full rates" means the prior year assessment of adjusted property at full
rates minus current year homestead exemptions plus current year net assessment
growth all as certified by the Revenue Cabinet.
(2)
"Current year total valuation of personal property" means the sum of
tangible personal property, effective public service company tangible property
and distilled spirits property all as certified by the Revenue Cabinet.
(3) "Current
year total valuation of real property" means real estate plus effective
public service company real estate property minus net new real estate and new
effective public service company real estate property all as certified by the
Revenue Cabinet.
(4) "Effective
public service company property" means assessments which may be adjusted
by the Revenue Cabinet for apportioned property not subject to full taxation.
(5)
"Maximum revenue collectible" means the prior year's permissive tax
revenue plus the levied tax rates per $100 of assessed value for real and
tangible property times the prior year assessment of real and tangible property
as certified by the Revenue Cabinet and the maximum motor vehicle revenue collectible.
(6)
"Maximum motor vehicle revenue collectible" means seven (7) times the
prior year levied motor vehicle tax rate plus five (5) times the current year
levied motor vehicle tax rate divided by twelve (12) times the prior year
assessment of motor vehicles as certified by the Revenue Cabinet.
(7) "Prior
year adjusted tax base" means the prior year assessment of adjusted
property at full rates minus current year homestead exemptions both as
certified by the Revenue Cabinet.
(8) "Prior
year revenue from real property" means the prior year real estate tax rate
levy times the prior year total valuation of real property as certified by the
Revenue Cabinet.
(9) "Prior
year revenue from personal property" means the prior year personal
property tax rate levy times the prior year total valuation of personal
property as certified by the Revenue Cabinet.
(10) "Prior
year total valuation of personal property" means the sum of prior year
tangible personal property, prior year effective public service company
tangible personal property and prior year distilled spirits property all as
certified by the Revenue Cabinet.
(11) "Prior
year total valuation of real property" means prior year real estate
property plus prior year effective public service company real estate property
both as certified by the Revenue Cabinet.
(12)
"Current year projection for permissive taxes" means prior year
permissive tax collections divided by prior year total valuation of property
and motor vehicles times the current year total valuation of property and motor
vehicles all as certified by the Revenue Cabinet or as estimated by the school
district.
Section 2.
Required Data. Required data for school district tax rate and related
calculations shall include:
(1) Property
assessments from the Department of Property Taxation, Revenue Cabinet provided
pursuant to KRS 160.470(5);
(2) Tax rates
levied by school districts;
(3) Average
daily attendance (ADA) as calculated pursuant to 702 KAR 3:270, Section
2(3)(a);
(4) Estimated
growth ADA;
(5) The state
equalization amount as defined in 702 KAR 3:270, Section 1(11);
(6) Calculated
base SEEK funding as defined in 702 KAR 3:270, Section 1(2);
(7) Tax receipts
collected based on prior year tax levies which may be adjusted for unusual
circumstances as determined by the local school district and the Division of
Finance, Department of Education;
(8) Collection
rates as defined in 702 KAR 3:270, Section 1(3); and
(9) The annual
report of tax collections as prepared by the school district's tax collector
pursuant to KRS 160.510.
Section 3. Compensating,
Four (4) Percent Increase and Subsection (2) Tax Rate Formulas. (1)
Compensating tax rate. The compensating tax rate defined in KRS 132.010(6) and
certified to the school district by the Department of Education pursuant to KRS
160.470(4)(b) shall be calculated as follows:
(a) Compensating
Tax Rate I. The Compensating Tax Rate I formula shall be as follows:
1. Prior year
revenue from real property;
2. Divided by
the current year total valuation of real property;
3. Rounded to
the next higher one-tenth (1/10) cent;
4. Equals the
Compensating Tax Rate I.
(b) Compensating
Tax Rate II. The Compensating Tax Rate II formula shall be as follows:
1. Prior year
revenue from real property plus prior year revenue from personal property;
2. Divided by
the current year total valuation of adjusted property at full rates;
3. Rounded to
the next higher one-tenth (1/10) cent;
4. Equals the
Compensating Tax Rate II.
(c) The
Compensating Tax Rate shall be the higher of the Compensating Tax Rate I and
the Compensating Tax Rate II.
(2) Four (4)
percent increase rate. The four (4) percent increase rate certified to the
school district by the Department of Education pursuant to KRS 160.470(c) shall
be calculated as follows:
(a) Compensating
tax rate as calculated pursuant to subsection (1) of this section;
(b) Times
current year total valuation of real property;
(c) Times 104
percent;
(d) Divided by
current year total valuation of real property;
(e) Rounded to
the next lower one-tenth (1/10) cent;
(f) Equals the
four (4) percent increase rate.
(3) Subsection
(2) rate. The Subsection (2) rate certified to the school district by the
Department of Education pursuant to KRS 160.470(4)(a) shall be calculated as
follows:
(a) Prior year
maximum real estate property tax rate;
(b) Times prior
year total valuation of real property;
(c) Plus prior
year maximum personal property tax rate;
(d) Times prior
year total valuation of personal property;
(e) Divided by
the prior year adjusted tax base;
(f) Rounded to the
next lower one-tenth (1/10) cent;
(g) Equals the
Subsection (2) rate.
(4) If the
percentage increase in revenue from real property produced by the compensating,
four (4) percent increase and Subsection (2) tax rates is less than the
percentage increase in revenue from personal property based on the same rates,
then equal tax rates as calculated pursuant to this section for the
compensating, four (4) percent increase and Subsection (2) tax rates shall be
certified for both real estate and personal property.
Section 4.
Limits on Personal Property Tax Rates. If the percentage increase in revenue
from real property produced by the compensating, four (4) percent increase or
Subsection (2) tax rates is more than the percentage increase in revenue from
personal property based on the same rates, then personal property tax rates
certified to the local school district shall be the lower of the prior year
personal property tax levy or the tax rates calculated as follows:
(1) Personal
property compensating tax rate.
(a) Prior year
revenue from personal property,
(b) Times 100
percent plus the percent increase in real property revenue based on the
compensating tax rate as calculated pursuant to Section 3(1) of this
administrative regulation;
(c) Divided by
the current year total valuation of personal property;
(d) Rounded to
the next higher one-tenth (1/10) cent;
(e) Equals the
personal property compensating tax rate.
(2) Personal
property four (4) percent increase rate.
(a) Prior year
revenue from personal property;
(b) Times 100
percent plus the percent increase in real property revenue based on the four
(4) percent increase tax rate as calculated pursuant to Section 3(2) of this
administrative regulation;
(c) Divided by
the current year total valuation of personal property;
(d) Rounded to
the next higher one-tenth (1/10) cent;
(e) Equals the
personal property four (4) percent increase tax rate.
(3) Personal
property Subsection (2) tax rate.
(a) Prior year
revenue from personal property;
(b) Times 100 percent
plus the percent increase in real property revenue based on the Subsection (2)
tax rate as calculated pursuant to Section 3(3) of this administrative
regulation;
(c) Divided by
the current year total valuation of personal property;
(d) Rounded to
the next higher one-tenth (1/10) cent;
(e) Equals the
personal property Subsection (2) tax rate.
Section 5.
Maximum Equivalent Tax Rate Allowed Pursuant to KRS 157.440(1)(a). The maximum
equivalent tax rate allowed pursuant to KRS 157.440(1)(a) shall be the higher
of the 1989-90 equivalent and the maximum Tier I equivalent tax rate calculated
as follows:
(1) Calculated
base SEEK funding as defined in 702 KAR 3:270, Section 1(2);
(2) Times
fifteen (15) percent;
(3) Divided by
average daily attendance;
(4) Equals
maximum per pupil Tier I revenue;
(5) Divided by
the greater of the current year total valuation of property and motor vehicles
divided by the average daily attendance and the statewide equalization amount
as defined in 702 KAR 3:270, Section 1(9);
(6) Rounded to
the next higher one-tenth (1/10) cent;
(7) Plus the
required minimum thirty (30) cent equivalent tax rate pursuant to KRS
160.470(12)(a) and the five (5) cent levy pursuant to KRS 157.620(1)(a);
(8) Equals the
maximum Tier I equivalent tax rate.
Section 6.
Maximum Equivalent Tax Rate Allowed Pursuant to KRS 157.440(2). The maximum
Tier II equivalent tax rate allowed pursuant to KRS 157.440(2) shall be
calculated as follows:
(1) Calculated
base SEEK funding as defined in 702 KAR 3:270, Section 1(2);
(2) Times
thirty-four and one-half (34.5) percent;
(3) Divided by
average daily attendance;
(4) Equals
maximum per pupil Tier II revenue;
(5) Divided by
the current year total valuation of property and motor vehicles divided by the average
daily attendance;
(6) Plus the
maximum Tier I equivalent tax rate as calculated pursuant to Section 5 above
minus five(5);
(7) Rounded to
the next higher one-tenth (1/10) cent;
(8) Equals the
maximum Tier II equivalent tax rate.
Section 7. Motor
Vehicle Tax Rates. (1) Motor vehicle tax rates may be raised to the maximum
Tier I equivalent tax rate allowable pursuant to KRS 157.440(1)(a).
(2) Motor
vehicle tax rates levied pursuant to KRS 132.487 which are higher than those
allowed pursuant to KRS 157.440(1)(a) shall not be lowered.
Section 8. (1)
The Exonerations Tax Rate allowable pursuant to KRS 134.590(7) shall be
calculated as follows:
(a) Exonerations
Recovery Rate I. The Exonerations Recovery Rate I shall be calculated as
follows:
1. Prior year
real estate property tax levy;
2. Times prior
year total valuation of real property plus prior year real exonerations both as
certified by the Revenue Cabinet;
3. Divided by
current year total valuation of real property;
4. Rounded to
the next higher one-tenth (1/10) cent;
5. Equals the
Exonerations Recovery Rate I.
(b) Exonerations
Recovery Rate II. The Exonerations Recovery Rate II shall be calculated as
follows:
1. Prior year
real estate property tax levy;
2. Times prior
year total valuation of real property plus prior year real exonerations both as
certified by the Revenue Cabinet;
3. Plus prior
year personal property tax levy;
4. Times prior
year total valuation of personal property plus current year tangible
exonerations both as certified by the Revenue Cabinet;
5. Divided by
current year total valuation of adjusted property at full rates;
6. Rounded to
the next higher one-tenth (1/10) cent;
7. Equals the
exonerations recovery Rate II.
(2) The
exonerations tax rate certified to the school district by the Department of
Education shall equal the difference between the higher of the exonerations
recovery Rates I and II and the compensating rate as calculated pursuant to
Section 3(c) of this administrative regulation.
Section 9. SEEK
Rates Calculations. SEEK rates calculations to determine the property tax rates
necessary to achieve the required minimum thirty (30) cent equivalent rate,
maximum Tier I and maximum Tier II equivalent tax rates and a five (5) cent
equivalent rate shall be as follows:
(1) Minimum
thirty (30) cent equivalent rate. The property tax rate required to achieve the
minimum thirty (30) cent equivalent rate required pursuant to KRS
160.470(12)(a) shall be calculated as follows:
(a) Thirty (30)
cents;
(b) Times the
current year total valuation of property and motor vehicles as certified by the
Revenue Cabinet;
(c) Divided by
the collection rate as defined in 702 KAR 3:270, Section 1(3);
(d) Minus the
current year projection for permissive taxes;
(e) Minus the prior
year levied motor vehicle tax rate times the current year motor vehicle
assessment as certified by the Revenue Cabinet time ninety-six (96) percent;
(f) Divided by
the current year property assessment as certified by the Revenue Cabinet;
(g) Rounded to
the next higher one-tenth (1/10) cent;
(h) Equals the
property tax rate required to achieve the required minimum thirty (30) cent
equivalent rate.
(2) Maximum Tier
I property tax rate. The property tax rate required to achieve the maximum Tier
I equivalent rate allowable pursuant to KRS 157.440(1)(a) shall be calculated
as follows:
(a) Maximum Tier
I equivalent tax rate as calculated pursuant to Section 5 of this
administrative regulation;
(b) Times the
current year total valuation of property and motor vehicles as certified by the
Revenue Cabinet;
(c) Divided by
the collection rate as defined in 702 KAR 3:270, Section 1(3);
(d) Minus the
current year projection for permissive taxes,
(e) Minus the
prior year levied motor vehicle tax rate times the current year motor vehicle
assessment as certified by the Revenue Cabinet times ninety-six (96) percent;
(f) Divided by
the current year property assessment as certified by the Revenue Cabinet;
(g) Rounded to
the next lower one-tenth (1/10) cent;
(h) Equals the
property tax rate required to achieve the maximum Tier I equivalent tax rate
allowable.
(3) The property
tax rate required to produce a five (5) cent equivalent tax rate shall be
calculated as follows:
(a) Five(5)
cents;
(b) Times the
current year total valuation of property and motor vehicles as certified by the
Revenue Cabinet;
(c) Divided by
the collection rate as defined in 702 KAR 3:270, Section 1(3);
(d) Divided by
the current year property assessment as certified by the Revenue Cabinet;
(e) Rounded to
the next higher one-tenth (1/10) cent;
(f) Equals the
property tax rate required to produce a five (5) cent equivalent tax rate.
(4) Maximum Tier
II property tax rate. The property tax rate required to achieve the maximum
Tier II equivalent rate allowable pursuant to KRS 157.440(2) shall be
calculated as follows:
(a) Maximum Tier
II equivalent tax rate as calculated pursuant to Section 6 of this
administrative regulation;
(b) Times the
current year total valuation of property and motor vehicles as certified by the
Revenue Cabinet;
(c) Divided by
the collection rate as defined in 702 KAR 3:270, Section 1(3);
(d) Minus the
current year projection for permissive taxes;
(e) Minus the
prior year levied motor vehicle tax rate times the current year motor vehicle
assessment as certified by the Revenue Cabinet times ninety-six (96) percent;
(f) Divided by
the current year property assessment as certified by the Revenue Cabinet;
(g) Rounded to
the next lower one-tenth (1/10) cent;
(h) Equals the
property tax rate required to achieve the maximum Tier II equivalent tax rate
allowable.
Section 10.
Equivalent Tax Rates. (1) The levied equivalent tax rate used to determine
eligibility for Tier I and Facility Support Program of Kentucky (FSPK) state
equalization shall be calculated as follows:
(a) Current year
real estate tax levy times current year total valuation of real property as
certified by the Revenue Cabinet;
(b) Plus the
current year personal property tax levy times the current year total valuation
of personal property as certified by the Revenue Cabinet;
(c) Plus the
current year motor vehicle tax levy times the current year total valuation of
motor vehicles as certified by the Revenue Cabinet;
(d) Plus current
year projected permissive tax collections;
(e) Times the
collection rate as defined in 702 KAR 3:270, Section 1(3);
(f) Divided by
the current year total valuation of property and motor vehicles as certified by
the Revenue Cabinet;
(g) Rounded to
the next lower one-tenth (1/10) cent;
(h) Equals the
levied equivalent tax rate.
(2) The
collected equivalent tax rate used for comparison to the prior year's levied
equivalent tax rate to determine if the tax receipts as submitted are
reasonable shall be calculated as follows:
(a) Total prior
year tax receipts;
(b) Divided by
the prior year total valuation of property and motor vehicles as certified by
the Revenue Cabinet;
(c) Equals the
collected equivalent tax rate.
Section 11. Five
(5) Cent Tax Rate for Growth. (1) To meet the eligibility requirements to levy
the five (5) cent tax rate for growth pursuant to House Bill 810 of the 1994
General Assembly, the following shall apply:
(a) Adjusted
average daily attendance (AADA) as calculated pursuant to 702 KAR 3:270(3)
shall be used to calculate the required growth in ADA as follows:
1. Prior year
end of year AADA;
2. Minus the
fifth previous year end of year AADA;
3. Equals the
growth in ADA used to calculate eligibility
to levy the five (5)
cent tax rate for growth;
(b) Districts
qualifying to levy the five (5) cent tax rate for growth shall certify to the
Division of Finance, Department of Education that current student enrollment
exceeds available classroom space; and
(c) Qualifying
debt service shall be in place at the time of the levy of the five (5) cent tax
rate for growth.
(2) The property
tax levy required to achieve the five (5) cent tax rate for growth shall be
calculated pursuant to Section 9(3) of this administrative regulation.
Section 12. Tax
Rate Certification. (1) Tax rates shall be certified to the school district by
the Department of Education upon receipt of the assessment from the Revenue
Cabinet, a listing of tax receipts collected based on the prior year tax levy
as provided by the school district and an annual tax collector's report as
provided by the school district to verify prior year tax collections.
(2) Pursuant to
House Bill 81 of the 1994 General Assembly, school districts shall levy tax
rates within forty-five (45) days of the Revenue Cabinet's assessment
certification. Failure to meet this deadline shall require the use of the
compensating tax rate as calculated pursuant to Sections 3 or 4 of this
administrative regulation for that year's tax bills. Levies which are subject
to recall shall follow the provisions of KRS 132.017.
(3) Unusual
circumstances as determined by the local school district and the Division of
Finance, Department of Education may allow a school district's tax rates to be
revised and recertified by the Department of Education. (21 Ky.R. 1404; Am.
1735; eff. 2-2-95.)
