Passing a nickel tax

Passing a nickel tax

Passing a nickel tax:
Dotting the i’s, crossing the t’s and strategizing
Kentucky School Advocate
April 2017
By Madelynn Coldiron
Staff writer
Is the Recallable Nickel in your Future or Should It Be? That was the question posed by clinic session B6 during KSBA’s annual conference Feb. 24-26.

Gauging from the interest shown by the 80-plus attendees, a bumper crop of boards may be seriously pondering an answer to that. While presenter Dr. Robert Tarvin explained the history and the legal ins and outs of the tax, he also shared some insights and tips for school boards that are looking at taking that step.

First, a board should decide how it is going to approach the issue: quietly or with a lengthy, all-out public relations campaign, said Tarvin, a former Kentucky School Facilities Construction Commission executive director who now works for Ross, Sinclaire & Associates, LLC, which handles school bond issues.

“If it’s p.r., you’ve got to work it,” he said. “If you’re going to do a ‘stealth,’ we can help you to make your tax schedule and make it happen.”

Whatever approach the board takes, it must be sure to follow the exacting legal process, from advertising the vote in the proper format (newspaper ad size: not less than 12 column inches) to setting the date for a public hearing to publishing notice of the action taken.
A crew from Jamison Drilling prepares to do core drilling to see if the soil is suitable
for a geothermal hybrid HVAC system at the site of Lewis County’s new elementary
school, made possible by a nickel tax. (Photo courtesy of Lewis County Schools) 

There are many legal steps involved, Tarvin said, “and you need to hit every one of them. Because if you do get challenged in court, you want to make sure you’re good every step of the way. If you missed a step, you could easily lose the whole thing.”

Timing is a big factor in a district’s nickel tax strategy. August is the worst time for a board to pass the tax, he said. That’s because the 45-day period during which it can be recalled pushes it up against the time during which tax bills are prepared. Plus, other governmental bodies are setting tax rates around that time, “and we don’t really want to talk about it any more than we have to,” Tarvin explained.

A nickel tax vote by the board is OK in June and January to March, he said. But his No. 1 preference is for December. “You pass it in early December, your timing is right, you run through Christmas break (with the 45-day period). They’re talking about Christmas – there aren’t a lot of people talking about school taxes,” he said.

Ideally, a board should work to avoid the filing of a recall petition, Tarvin said. But if a petition is filed, meets the requirements and is certified by the county clerk, the board faces another decision: go forward with the tax or drop it. Board teams should ask themselves, “Do the kids need it and can we make it happen?” Tarvin said, while they also must acknowledge there are political repercussions.

If the board forges ahead, “Don’t go into it half-baked – go into these things to win,” he said. “You started the process – fight it all the way to the end.”

There is yet another choice after that, however: whether to pay the additional cost of a special election – the average cost is $36,000, Tarvin said – or to hold the referendum in conjunction with a general election.

He believes, though some districts have bucked this successfully, that the worst time for a nickel tax referendum is on a presidential election ballot, with a gubernatorial election being the second-worst, because the general turnout is so high.

“You’re going to have people voting on your school tax who don’t know anything about it, have no idea and probably read no article about it,” he said. “They’re just going to see the word tax and think, ‘Man, I’ve not gotten to vote against one lately and I’m voting against it.’”

In addition, if the board passed the tax much earlier in the year, it stands to lose any momentum it has built up. “Why let it die until November comes around?” Tarvin asked.

While boards recoil from the cost of a special election, speed is one advantage: it must be held within 35 days of the petition being certified. As for negative public reaction to the cost, Tarvin said those who are against the tax will vote against it anyway.

If there is no recall petition or if the recall election fails, then the tax stands – but that’s not the board’s final responsibility. The state’s equivalent funding of the nickel – if the district is eligible for it – must be ensured in statute, which means contacting legislators. “To this point in time, the legislature has been sympathetic to the idea that local people made this effort, they put this tax on themselves and they withstood recall,” Tarvin said.
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