Citing a declining tax digest and rising operational costs, the Dawson County Board of Education voted 3-0 on Friday to raise the county's millage rate by 1.7 mills.
The millage rate, which will be 17.246 mills, is part of a formula used to calculate property taxes, where one mill equals $1 for every $1,000 in assessed property value.
Board member Elaine Wilson made the motion to approve the tax increase, with a second from Will Wade. The final vote was cast by Acting-Chair Cecil Bennett. Chairwoman Doris Cook had to leave early and Roger Slaton was absent.
The decision was preceded by two hearings on the issue, during which no one spoke against the plan.
Last month, the board set a $32 million budget for the new fiscal year, which started July 1. The budget was set with the expectation the tax digest would continue to drop, this time by about 9.4 percent.
While the digest is estimated to fall by 7.33 percent, the board factors in some extra "cushion," according to Superintendent Keith Porter.
"After six straight years of declining tax digests in Dawson County, we are hopeful that FY14 will be the last decline, and property values will stabilize," Porter said.
"Although the economy seems to be rebounding in many areas, as far as school funding is concerned, we are entering our lowest economic time. We are hopeful that the ... budget, which we are presently entering, will finally be the funding ‘basement' for our school system."
Had the school board not raised the millage rate, the system would have been in the black through fiscal year 2014, before ending fiscal year 2015 with a $4 million deficit.
Failing to secure the necessary funding and then going into debt could have led the state to take over the school system. It would then set the millage rate itself and constantly monitor the district until the debt and ensuing state levies had been repaid.
"They'll raise your millage for you," said board member Elaine Wilson. "We had that happen to us a long time ago. For three years, our millage was set for us at 17.4 percent because we had run a negative fund balance at the end of the year."
If that scenario had unfolded, the state would have given the school board three years to eliminate the negative fund balance and restore local control.
According to board member Will Wade, one of the issues with the millage rate is the state's Quality Basic Education Funding, or QBE, program.
The program automatically takes 5 mills from the board's tax revenue and redistributes the funds to other school systems in the state.
The formula has not been updated since it was introduced in 1985.
"We, as individuals and as a group, have tried to compel the legislature, as well as other school boards across the state, to push the issues about the QBE formula," Wade said during the second hearing.
"The school boards can push the issue all we want, but that's not going to fix it. The taxpayers are going to have to start bringing up the issue of QBE with their government."
During the hearing, resident Richard Hamil voiced his concern at how the county government handles the tax collection process with the local school system.
This year, the school board will pay the county nearly $400,000 to collect taxes for them, according to Porter and Finance Director Jamie Ulrich's presentation. The county's collection rate is currently set at 2.5 percent.
"I just flat don't understand that," Hamil said. "That's taking taxpayer money and shuffling it from one entity to another. That's not fair to the taxpayer.
"You have the tax digest already. That amount of money has to be collected for their taxes already. Why not just collect the school's at the same time?"
Porter said the school system has cut back in every conceivable way over the years in order to avoid raising the millage rate and putting the burden on the taxpayers.
"In the FY13 school year, we reduced staff by 41 employees from the previous year, and at the same time saw our student enrollment increase," he said.
"Over the past five years, our employees have lost over $10 million in salary and benefits as we have tried to make our budgets work through calendar reductions and reductions to benefits."
Porter said the system has also been forced to eliminate four middle and high school academic programs over the past two years, reduce the school year for students by two days and raise class sizes.
"We have truly reached a critical time that we must struggle through and still maintain a quality education for our children," he said. "With these cuts, we have tried to buffer our students. But even with our best efforts, decisions are now impacting students."