Jonesboro Sun

  News
  Sports
  General Interest
  Lifestyles
  Editorial
  Letters
  Events
  Police & Courts
  Obituaries

Find a Vehicle
Find a Home
Jobs
Auctions
Classifieds
Place Class Ad
Subscribe Online
Food
Better Health & Living
From House To Home
Photo Gallery
Progress 2007
Forms

MOVIES

518 Carson
Jonesboro, AR 72401

For Sun home delivery:
Call 935-5525
or 1-800-237-5341

MEMBER OF THE ASSOCIATED PRESS The Associated Press is entitled exclusively to the use of republication of all the local news printed in this newspaper as well as AP news dispatches.

Friday, May 16, 2008

School tax rate is below state average

Jonesboro school Superintendent Kim Wilbanks told the district’s board of directors last week that she will soon propose a property tax increase. While the board could still do that in time for the Sept. 16 regular school election, Dr. Wilbanks is thinking in terms of a March special election instead. The district hasn’t had an increase in 20 years; three proposals have been rejected by the voters, the most recent in 2005 and ’06.

Wilbanks told the board that she will probably recommend an increase of 4.5 mills — 3.4 for maintenance and operations and 1.1 for debt service. That would place the district’s total rate at 34.5 mills — 28.4 for M&O and 6.1 for debt service.

The state’s property tax system is an albatross for public education — hard to understand, harder to explain, inequitable in the sense that all citizens don’t pay it and a pain to budget for and collect. But it’s the primary means to raise local revenue for the schools so that’s what administrators and directors must do until the state finds the wisdom and courage to make a change.

Remember the basics: A mill is one-tenth of a cent. A property tax rate is applied to real and personal property at 20 percent of its market value — called its valuation. Real property means land and structures built on the land; personal property for individuals mainly means vehicles, but for businesses it can be inventory and other equipment, as well as vehicles. Individuals who don’t own a vehicle or real property don’t pay a property tax.

For each $1,000 of assessed valuation a 1-mill tax raises $1 in revenue.

A major complication, both for budgeting by government agencies that benefit from the property tax and for individuals and business owners who pay it, is that it’s a 2-year process. Your property is assessed (or valued) between January and May of one year, but your tax for that year isn’t due until Oct. 10 of the next year. And there is no real advantage to pay early so most of us don’t.

It’s not uncommon, therefore, for taxpayers to move out of district or even out of state before their tax comes due, making that revenue difficult or even impossible to collect. Businesses and individuals die or go bankrupt during the 2-year process, and some of that revenue is never collected. A 90 percent property tax collection rate is considered reasonably good. The Jonesboro School District bases its budget on an 87.5 percent collection rate because of the district’s collection history.

Fees collected on some of the delinquent taxes make up some of the difference, but the late fee is a flat 10 percent for one day or one year.

To put the proposed 4.5-mill increase into perspective, we examined the state Department of Education’s Millage Report for 2008 tax collections. It shows, among other things, the M&O and debt service rates for each of the 248 school districts. The average M&O rate for 2007 assessments was 25.735 mills, including dedicated M&O (which can be spent on only certain things such as computer upgrades). While most have stayed at the state’s minimum requirement of 25 mills, 56 districts were above that level in ’07. Among the highest at 36.4 is the tiny Weiner district in Poinsett County, which is struggling to survive.

Fifteen districts were higher than the 28.4 rate Wilbanks proposes.

The state average for debt service millage is 10.514, more than double Jonesboro’s present rate and higher than is proposed. Those rates range as high as 23.9 at Fouke (Miller County).

Overall, the average total millage rate for all districts in the state in 2007 was 36.249, well above Jonesboro’s present 30 mills. The proposed 34.5 rate would still be below the state average. Jonesboro is one of 18 districts at 30 mills or below for 2007. Fouke, which had a total enrollment just over 1,000 students last year, had the highest rate — 49 mills.

The ADE millage chart also shows that voters in 28 districts agreed to property tax increases last year (a few in a second election). Forty-nine others, though, rejected proposals for increases, and the result was not clear on the chart as to four districts.

Editor’s note: Next we’ll look at the revenue Jonesboro receives from the property tax and other sources.

—Roy Ockert Jr.