Hillsboro R-3 School District voters will be asked April 2 to approve a permanent Prop C property tax rollback waiver, after school officials discovered the district’s temporary waiver had lapsed.
The Hawk Rollback Waiver ballot measure needs a simple majority to pass.
If the measure fails, district officials say they will lose about $1.6 million in funding next school year and will have to make serious cuts to the 2019-2020 budget, greatly impacting school operations.
“I can’t understate the importance of the waiver and its impact on the students of our school district,” said Jon Isaacson, a current assistant superintendent who will become the R-3 superintendent July 1. “Without the waiver the district will be faced with reducing our operating expenses by approximately $1.6 million.”
Those cuts, as discussed in a March 18 special Board of Education meeting, could include the elimination of all student activities and athletics and the reduction of up to 10 teachers. Staff salaries could be frozen and other programs could be slashed, school officials said.
“(Those possible cuts) will have a negative impact on many of the positive things we do at our school district and the opportunities that we provide for the kids of the community,” Isaacson said. “Without the waiver, our employees will be negatively impacted as well.”
Prop C, approved by state voters in 1982, provides a 1-percent statewide sales tax with the revenue distributed to all school districts on a per-pupil basis. Half of the revenue is dedicated to increase funding for education and the other half is dedicated to reduce property taxes through a rollback.
Senate Bill 380, passed in 1993, permits school districts to ask voters to waive the Prop C property tax rollback. Districts that have passed such a measure do not have to reduce their property tax through the rollback.
Hillsboro’s problem is the Prop C waiver voters approved in April 1998 had a sunset clause, so it ended in 2017.
The Hillsboro School District has had several superintendents since the waiver was passed, and the information about the 2017 sunset apparently was not passed from one superintendent to the next, district officials said. In addition, the deadline somehow eluded state officials who could have caught the problem before it snuck up on the district.
Because of the Hillsboro R-3 Prop C rollback waiver sunset clause, the district lost its public permission to maintain the waiver, Isaacson said.
Hillsboro school officials learned about the problem in late September 2018 after submitting the district’s 2018-2019 tax levy information to the state.
School officials tried to make up for this year’s loss of about $1.3 million in funding, at least temporarily, by holding down spending.
“For example, the district didn’t order new textbooks this school year, saving $400,000,” Isaacson said. “We also did not replace a Central Office secretary position. For next year, we plan to restructure Central Office by not replacing one administrative position and additional Central Office support staff positions due to attrition.”
In addition, school board members temporarily made up for this year’s loss by reconfiguring the amounts going into the district’s different tax levy funds. That means for this school year, the district’s overall tax levy remained at $4.6185 per $100 assessed valuation, which brings in nearly $13 million annually.
After changing the amounts that go into the various funds, the district will bring in about the same amount of overall revenue each year, but the money that goes to the debt service fund can’t be used for general operations, which leaves the district in a bind, Isaacson said.
He said the changes will result in the district’s debt being paid off sooner, but the district has less money to use for day-to-day expenses.
The rollback waiver would cost a Hillsboro R-3 resident who owns a home valued at $100,000 by the Jefferson County Assessor’s Office about $110 a year in real estate taxes, which are charged on 19 percent of the home’s value. There also would be an impact to personal property taxes, which are charged at 33 percent.