Local property taxes account for one-third of the total funds going into districts’ programs and represent about 43% of the overall state property tax funds levied. As discussed in prior articles, the state school funding formula largely determines school property tax rates and, the amount each district receives in state aid.
People often ask, “Why don’t we just remove property taxes from the formula entirely?” There are several reasons why this isn’t a wise move.
· It would take away roughly $1.25 billion dollars statewide, leaving lawmakers to decide whether to raise the sales tax or income taxes to make up that difference.
· Property taxes also add stability to the funding of school districts. For example, if we operated solely under the sales tax, the amount available for school funding would surely fluctuate depending on consumer spending.
· Just as many people found out during the 1990’s, too much reliance on a single funding source invites large swings in funding, which isn’t good for an entity unable to adjust to midyear revenue changes. Diversification is a prudent investing strategy that applies to schools as well.
Considering the aforementioned reasons and the present revenue and political climate, removing property taxes from the school finance formula seems unlikely.
No public official, whether our local school board or city and county officials, takes the impact of raising property taxes lightly. In most cases, public officials exhaust all other options before asking property taxpayers for more funds. However, when the General Assembly cuts short state aid and we experience additional, unforeseen expenses such as increased fuel and energy prices, we really have no other alternative except to raise local property taxes or reduce expenditures. Seventy-five to 85 percent of the local budgets are comprised of salary and benefit costs, which doesn’t leave much discretionary spending to cut. No one likes property taxes, but they are an essential part of efficient funding of our schools. In comparing IKM-Manning to the other 351 school districts, with 1 the highest tax rate and 351 the lowest tax rate, IKM-Manning ranks 279th in total property tax rate (all funds) at $12.9411.
Once all of the districts in Iowa establish their budgets based on the combination of state aid and local property taxes they receive, there are still many restrictions on where and how that funding can be spent.
Congratulations to all of our fall extracurricular participants, you represented IKM-Manning in a great fashion, and thanks to all the coaches, volunteers, and especially parents.
Just a reminder that Burger Town hits the stage this week and great job on the fall concert this past week.
People often ask, “Why don’t we just remove property taxes from the formula entirely?” There are several reasons why this isn’t a wise move.
· It would take away roughly $1.25 billion dollars statewide, leaving lawmakers to decide whether to raise the sales tax or income taxes to make up that difference.
· Property taxes also add stability to the funding of school districts. For example, if we operated solely under the sales tax, the amount available for school funding would surely fluctuate depending on consumer spending.
· Just as many people found out during the 1990’s, too much reliance on a single funding source invites large swings in funding, which isn’t good for an entity unable to adjust to midyear revenue changes. Diversification is a prudent investing strategy that applies to schools as well.
Considering the aforementioned reasons and the present revenue and political climate, removing property taxes from the school finance formula seems unlikely.
No public official, whether our local school board or city and county officials, takes the impact of raising property taxes lightly. In most cases, public officials exhaust all other options before asking property taxpayers for more funds. However, when the General Assembly cuts short state aid and we experience additional, unforeseen expenses such as increased fuel and energy prices, we really have no other alternative except to raise local property taxes or reduce expenditures. Seventy-five to 85 percent of the local budgets are comprised of salary and benefit costs, which doesn’t leave much discretionary spending to cut. No one likes property taxes, but they are an essential part of efficient funding of our schools. In comparing IKM-Manning to the other 351 school districts, with 1 the highest tax rate and 351 the lowest tax rate, IKM-Manning ranks 279th in total property tax rate (all funds) at $12.9411.
Once all of the districts in Iowa establish their budgets based on the combination of state aid and local property taxes they receive, there are still many restrictions on where and how that funding can be spent.
Congratulations to all of our fall extracurricular participants, you represented IKM-Manning in a great fashion, and thanks to all the coaches, volunteers, and especially parents.
Just a reminder that Burger Town hits the stage this week and great job on the fall concert this past week.
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