VanHoose Education Center

VanHoose Education Center | Photo by Olivia Krauth

Taxes may go up as early as this fall, as the Jefferson County Board of Education begins exploring potential tax hikes.

The school board is expected to take a first look at multiple tax options to raise millions for the district at a work session Tuesday night. If implemented, the tax increases would help build new schools, renovate existing ones and provide more money for classroom initiatives. (Only property tax increases under 4% can be implemented without a ballot measure.)

Education Commissioner Wayne Lewis dinged JCPS in a 2018 state audit for not utilizing three tax hikes — a nickel tax, a utility tax and a full 4% property tax increase — to help pay for around $1.3 billion in facility needs throughout the district. It would take JCPS 21 years to fix everything then considered a problem at the rate JCPS had budgeted, the audit found. A JCPS spokeswoman said the district still has roughly the same amount in facility needs.

The audit also mentioned the district’s decision to not raise property taxes 4% during the first year of former superintendent Donna Hargens’ tenure. That decision, the audit said, lost JCPS $16 million that year and every year after.

All three revenue options are expected to be discussed Tuesday.

A nickel tax would be an additional 5 cents per $100 of the assessed property value on top of any existing property taxes. Funds raised through a nickel tax are required to be spent on facility needs, like fixing schools or building brand new ones.

The Kentucky Department of Education estimates a nickel tax would generate around $38 million for the district’s facilities, according to board meeting documents.

Earlier this year, JCPS approved a $120 million facilities plan to build four new schools and heavily renovate the Academy @ Shawnee in the next two years. At least one board member, Chris Brady, has said he wants more new schools on top of that, often noting the district is spending millions to renovate aging buildings when they could spend a bit more to have a brand new building.

And others, including James Craig, have supported adding a nickel tax to make those schools happen.

Better facilities would draw more students to JCPS, Craig said in a Twitter thread Friday. More students would boost the district’s average daily attendance, which increases how much the district gets in per-pupil funding from the state, he said.

“Voting to build four new schools was a fantastic way to start my first year on the board,” Craig tweeted. “I’d like to see us add to that list. Why not four more next year? And the year after?”

Passing a nickel tax would provide enough funds to build up to 16 more schools, Craig said. “Let’s get this nickel tax, and let’s keep building new schools.”

Another potential option, a utility tax, would charge up to 3% on a variety of services — cellphone, electric, gas, water and potentially cable and satellite. A vast majority of Kentucky school districts — 159 out of 173 — use a utility tax, according to board meeting documents.

Unlike a nickel tax, funds raised through a utility tax would not be limited to facility needs. An estimated $35 million from the tax would instead go to the district’s general fund.

A property tax increase is also on the table. The school board raised property taxes around 3% last year, to 72.5 cents for every $100, bringing in an estimated $20 million for JCPS. Districts are allowed to raise taxes 4% annually without needing a ballot measure.

Tuesday’s meeting will be the first step in a long process of enacting any increase. Most of the options require an advertising period and a public hearing in August before potentially being put on the ballot in November. The district could also vote on the increases in a special election or place them on future regular election ballots.

JCPS runs primarily on state funds and local taxes, the latter of which mainly come from property taxes. Money from occupational and motor vehicle taxes also help fund the district.

But state education funding has dropped over the past decade, leaving local districts — and taxpayers — to cover. When adjusted to be in 2019 dollars, JCPS is receiving less from the state in per-pupil SEEK funding than it was in 2008 — $315.5 million in 2008 when adjusted versus $247.9 million in 2019.