Here is my understanding about the levies condensed into bullet points, followed by a more thorough explanation (with links) written two years ago (and based on both some study of the Hancock Amendment to the MO Constitution – and separate fairly lengthy talks with our then-county treasurer and assessor.) After that is a needed correction to my explanation at the July Central Committee meeting (based on reflection, review of notes, and examination of the history of the tax levies in Ozark.)
Bullet points:
– school districts are one example of a taxing entity, just like the city or county or fire district or ambulance district
– sometimes (not always) taxing entities’ revenues increase by a “windfall” because property values/assessments have gone up substantially
– Art. X, Section 22 (the “Hancock Amendment”) of the MO Constitution is the part that limits how much of a “windfall” increase those local entities are allowed to get, and it’s codified in RSMo.137.073(2)
– that same Section 22(b) is the part that allows the debt-service fund to not be forced to be rolled back (I am missing the link that allowed schools to establish a separate debt-service fund, but I know it happened because we set two levy rates, one for general operating expenses and one for debt-service)
– once the limits of increase in revenue are hit, the taxing entity is supposed to “roll back” the levy rate so that the taxpayers will pay less the next year (and so the increase in funds – still an increase, mind you – will not be more than the limit)
– every taxing entity is required to – and does – do that, lowers their levy rate so that they don’t get as much of an increase the following year
– schools, though, have a second levy rate they also can set – the one for debt-service mentioned above – and so, whenever they have to “lower the levy rate” to satisfy the Hancock Amendment, they just lower the one that’s the operating fund, and they raise the one that’s the debt-service fund, thus leaving the tax rate the same rather than giving taxpayer relief, like the Hancock Amendment requires
– then, the next year, when they don’t get an increase (because property values are not reassessed every year), the district just lowers the debt-service levy back to where it was (or close) and raises the general operating fund levy back to where it was (or close) – but they have to ask the voters for approval to do it. Since the overall combined levy tax rate does not change, voters usually don’t mind doing this (nor understand what’s happening.)
More thorough explanation about the two levies:
I wrote about it last year: https://www.christinatonsing.com/public-statement-on-the-tax-levy/
and the year before: https://www.christinatonsing.com/about-the-tax-levy/
Needed Correction:
After a conversation about the pattern of shuffling money that school districts sometimes do – and why in the world would I be supporting any part of that – something seemed a little “off” to me, so I went back and reviewed my notes from previous years. I discovered that I seemed to have changed my thinking a little this year, by saying “let’s put it back in the general fund” rather than opposing both changes … which made me uncomfortable as I continued examining the reasoning. I appreciate those who have asked me questions about it – and even challenged me on it – so I could consider it some more. I have decided that I still agree that neither action in either part of this “creative financing shell game”, as some local elected office-holders have named it, should be rewarded with approval.
HOWEVER, more investigation led me to realize that this year’s transfer in Ozark is NOT the usual reaction to a previous year’s “creative financing” transfer (although that is indeed what happens in years when there’s a windfall increase.) Last year was a year when the District asked voters to “put it back” (and you can see that I opposed that then – and, unlike what I too hastily said at the central committee meeting, will continue to oppose it in the future, too.)
I was mistaken about the cause for the transfer that is happening this year when I explained it to the central committee. I deeply regret that, as I want to be reliable, and I hope this note will straighten out the facts for you. I have talked with both our current and future county assessors to be sure I am understanding it correctly.
The fact is that this year’s transfer is honestly just moving some of the future money out of the debt-service fund into the general operating fund so we can use that money to pay expenses. I still support this move, especially now that I am assured that it is not a response to a previous year’s avoidance of required lowering. Passing the ballot issue will not change the amount of taxes we pay, and rejecting it will not change the amount of tax we pay – it will not shorten the time we pay, nor lower what we pay. Rejecting it will still keep the same amount of funds going to the school; its failure would only disallow moving money from one fund to another. The one new thing I have learned is that it seems clear that, since the district is putting the levy transfer on the ballot for voters to decide, even if the increase-limiting threshold were to be reached this year, then the Hancock Amendment would not have an opportunity to be activated. I believe this is actually the way it should be done: asking voters ahead of time how and on what to spend their tax dollars.
Pictured at the right is a document from Ozark School Board minutes from last year’s tax levy meeting which shows the district’s tax rate history. If you examine it closely, you will notice that, for each odd-numbered year in which a lowering of the general operating levywas required (because not all of them have a “windfall” increase in revenue), there is a corresponding increase in the debt-service levy rate, and the following even-numbered year usually has at least part if not all of the amounts being switched back (i.e., the general operating levy rate is raised and the debt-service levy rate is reduced.) You will also be able to verify that 2023 was a year when the school district was required to lower the levy but played the “creative financing” game with the taxpayers’ money, and 2024 was the year the district “put it back.” There are links to that document and others at https://www.christinatonsing.com/announcing-the-august-meeting/
Lastly, there’s been some concern about where the money is going. The Board already approved in June a salary increase for the “middle” of the teacher salary schedule, so our experienced teachers (whose salaries had fallen badly behind other districts) would earn a little more. In addition to that targeted increase for those with certain years of experience, there is also an across-the-board 3.3% raise, which I think most of us consider “normal” cost-of-living (although Ozark still ranks behind several area schools in our salary schedules!) So, as one friend asked me today in the store, yes, these extra funds really are going to the teachers. You can see it in the June board meeting agenda. We’ve already allocated it to the teachers.
Note: You can also hear a great 4-minute explanation of the salary changes at the June board meeting video archive, starting at the 47-minute mark. (Then, if you skip to the 1:22:10 mark, you can hear a rousing discussion about missed deadlines for homework not (yet) being included in academic grades, followed by a discussion about the addition of a dress code and the elimination of cell phones in our schools.)
Please feel free to contact me if you have any thoughts or questions!
As always, I speak only for myself and do not intend to represent the Board to you in anything I say or post.
I do, however, intend to do my job representing YOU to the Board!!