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Can we have a nickel?

Hancock County

Hancock County students lobby school board for property tax increase to build new school
 
Kentucky School Advocate
September 2019
 
By Brenna R. Kelly
Staff writer

Mold grows in classrooms, cracks snake up the cinder block walls and congestion fills the narrow halls of Hancock County Middle School – so a group of eighth grade students decided to do something about it. 

They asked the board of education to pass a tax to fund a new school.

“It’s pretty powerful when your students bring that issue to you,” said Superintendent Kyle Estes, “it’s hard not to listen.” 

School board chairman Allen Kennedy said the board had contemplated passing a 5.5 cent property tax, called a nickel tax, ever since 2016 when voters recalled an attempt to pass the tax, but had not planned to push for the tax this year. 

“It was a total surprise,” Kennedy said. “When we heard about it, we invited them to come to a board meeting and present.” 

After two student presentations, a public forum and a student-led tour of the school, the board in mid-August voted 5-0 to enact the tax. 

“We thought since we are students we could make a powerful difference,” said Danielle Ford, one of the students who helped lead the quest for a new school, “because we’re the ones experiencing this every day.” 

Student civics project
The drive to replace the 59-year-old school grew out of an eighth-grade U.S. history and civics project in which students learned about elections by campaigning to be superintendent and principal for a day, said social studies teacher Josh Roberts. 

During the election lesson, one of Roberts’ classes chose getting a new middle school as a campaign issue, he said. When that class won the election, the lesson could have ended there, he said. 

“Then they were like, let’s move forward on this, let’s really do this,” Roberts said. “The teachers were not heading this up. We’re not vocally leading it, and neither is the superintendent or the school board. It’s coming from them and they are pushing it because they had to go to that school every day and they know what it’s like.” 

The 29-student class divided into seven groups each researching different topics such as problems with the current school, safety issues, the difference in a new modern school and how new schools are funded. 

Students scraped mold from classrooms and grew the samples in petri dishes, they measured hallways, tested air vents and learned about how most Kentucky public school districts fund new school construction.

“I looked into what the nickel tax was, how there could be a 4 percent increase if we didn’t have the nickel tax, how the state matches the nickel tax and all of that kind of stuff,” said Lauren Kellems, who is now a ninth-grader at Hancock County High School. 

The students compared surrounding counties’ tax rates and analyzed the voting outcome of Hancock’s 2016 failed nickel tax which lost by 139 votes.  

They collected more than eight pages of signatures in support of a tax. The students shared their findings on social media to spread the word about the need for a new middle school. 

Going to the board
With their research complete, the students first presented their nickel tax request to the board of education this past May.

Though Kellems said she was nervous to speak in front of the board, both she and Ford knew that their research and evidence was solid.

“The petition was a really big part of the evidence. We had to show the board just how much people were behind it and how many people supported it,” Kellems said. 

Though the students hoped the board would vote in May, Kennedy told them the board needed more time and invited the students to present again in August at a public forum on the tax. In addition to their presentation, the students gave tours pointing out the problems in the building. 

During the tour, students pointed to a large crack in a stairwell that is covered with clear tape to protect students from the stone’s sharp edges. 

They showed residents the tiny elevator where two students often ride when one needs the elevator and another is there to help.

“Since the elevator is really slow and it’s really bad, they will both get to class late, so that’s learning time taken away,” Kellems said. 

Teachers and staff at the forum also explained problems at the 400-student school.

“The hallways were built in 1960 for classes of 25, and we have 280 kids in the sixth and seventh grade trying to go through those hallways,” Roberts said. “That leads to bullying, it leads to problems, fights and all kinds of potential issues.”

To combat the problem, some teachers let some classes go a few minutes early, taking time away from instruction, he said.

School officials discovered another problem after school started in August, said Principal Traci Sanders.

“We have no heat or cooling in the hallway,” she said. “You can imagine the temperature of that hallway on the first day of school. It was hot. We don’t know what’s going to happen this winter.” 

Though the district upgraded the HVAC system over the summer, classroom doors must remain closed and locked during instruction which blocks air from getting to the ductless hall, she explained.

The case for a nickel
At the public forum, Bob Tarvin, public school finance expert for Ross, Sinclair & Associates, explained that most new school construction in Kentucky is funded by a nickel tax. The tax allows districts to asses the equivalent rate of 5 cents on every $100 of assessed value. 

Tarvin pointed out that the Hancock board was planning to take the compensating tax rate plus the nickel. Many districts aren’t aware that if they pass the nickel tax and the tax is recalled, under state law, the board has to take the rate that would bring in 4 percent more revenue, he said. 

Nickel tax revenue, which is restricted to facility improvements, allows districts to leverage that money to bond construction projects. Hancock needs the tax because a renovation and addition to Hancock County High School has tapped out the district’s bonding capacity, Estes said. 

Few residents at the hearing spoke out against the tax. Most, like small business owner Danny House, supported the tax.

“I know it’s going to hurt a few people. I don’t like paying taxes either, but it’s a fact of life,” he said. “I think it’s the fiscal responsibility of the citizens of this county and I think it’s the fiscal responsible to pass this tax.”

A week after the forum, the board voted to set the rate at 68.9 cents per $100 of assessed value, which was the compensating rate, plus the 5.5 cent nickel. The board won’t know for sure until mid-October whether a recall petition will be submitted to the county clerk. If a petition were to be certified, the board would have to decide whether to rescind the tax or take the tax to a vote. 

Real-world skills
No matter the outcome, Roberts said the experience has taught his students skills they will use in school and beyond.

“It’s eye opening for them to use their communication skills, to research an issue and to be passionate about something and try to change it,” he said. “That’s the kind of real-world skills that they need.” 

Social studies is about more than just learning history, he said. The goal is to also teach students to become engaged citizens.

“They’ve learned about petitioning their government as a way to try to change the government,” Roberts said. 

Estes said the project made him proud of the district’s students and teachers. 

“This is what we are supposed to be teaching, seeing a need in the community and addressing it,” Estes said. “And the students have done that.”
 
What is the recallable nickel?

It is an additional equivalent tax rate of 5 cents per $100 of assessed value over the amount of revenue produced by the compensating tax rate defined in KRS 132.010 that would be dedicated to major renovation of existing school facilities, new construction and debt service. The term “equivalent” is important because the rate is generally calculated at slightly more than 5 cents. That is because tax collections are never 100 percent, and the nickel tax is collected only on real and personal property, not motor vehicles.
 
A recallable nickel may be equalized by state funding when it is provided by the legislature. That is its main advantage over simply raising the tax rate to reap 4 percent in additional revenue over the previous year. The former drastically boosts bonding capacity for capital projects; the other does not.

The 2018-20 state budget bill said that nickels levied before Jan. 1, 2016, would be equalized at 100 percent and districts that levied the nickel after Jan. 1, 2016 but before Jan. 1, 2018, would be equalized at 25 percent. The budget also said it was the General Assembly’s intent that the districts receiving partial equalization would receive full equalization in the 2020-22 budget until June 30, 2038, or the date the bonds are paid off. The budget also warned that it was the 2018 General Assembly’s intent that no nickels passed after Jan. 1, 2018, would be eligible for equalization funds. 
 
Photo 1:  Students Ashlynn Madden, Lauren Kellems, Danielle Ford, Logan Calderon and Sean Young and eighth-grade social studies teacher Josh Roberts show mold samples taken in the school during a public hearing on the tax. 
 
Photo 2:  Hancock County board chairman Allen Kennedy tells the crowd of about 50 people that the nickel tax is best way to fund a new middle school building and plan for the future of the district as fellow board members Raphael Wheatly (left) and David Emmick and Superintendent Kyle Estes (right) listen. The board later voted 5-0 to pass the nickel tax and take the compensating tax rate for a total of 68.9 cents per $100 of assessed property value.
 
Photo 3:  Mold students collected from middle school classroom grows in petri dishes labeled with the classroom’s name.
 
Photo 4: Danielle Ford, now a ninth-grader, points out a large crack in the wall during an open house to show the public the school’s condition.

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