School Board reaches out as new income surtax heads to the ballot

Friday, March 15, 2019

An election on April 2 will give voters final approval for Alta-Aurelia Community School District’s decision to put a new income surtax in the levy mix.

Superintendent Lynn Evans has been meeting with local Kiwanis clubs, pushing information about the new PPEL levy structure to the website and firing social media on all cylinders to ensure parents and residents are educated on what is happening.

“I think, in most conversations I’ve been having, that most are aware,” he said. Next week will prompt another push.

He’s confident that parents will be aware of the issue in time, and cautiously optimistic that they’ll approve the measure, particularly given the low taxes already in place.

“We’re in the lowest 15-20 percent for taxes in the state,” Evans said. “That’s why people are more open to discussion.”

The current voter-approved Physical Plant and Equipment Levy (PPEL) tax, standing at a rate of 67 cents per $1,000 of assessed property, will expire next year.

Voters will have the chance to give their two cents when they vote on the measure at the election, which the board filed for right under the deadline of February 15. The ballot measure requires a simple majority (50 percent) to be approved, and can be put to a vote again on the next available election date a few months after should it fail the first time.

Though the new structure would not generate any more income for the school, it would be new to renters without property, who would see it deducted in their annual state income tax filings.

The mix of property tax and income surtax could give the Board a tool should they feel the need to relieve property owners, particularly those with a large amount of property, of their tax burden.

The income surtax, whose rate will be determined next year, must be set at a minimum of 1 percent if enacted.

“The argument of income surtax is, if you make more money, you should be able to pay a little bit more,” Evans said.

The rate would show up on tax returns starting in 2020 and remain in effect for 10 years. The board has not yet determined an appropriate rate, but discussion suggested something at 10 percent or less.

“The thing we want to impress on the voters is that this is not a new tax, just something that’s already on the books,” Evans said at a February School Board meeting, after the Board decided on the new structure.

If approved, it will join a surtax that already exists for the Instructional Support Levy.

“It’s not increasing the tax (rate), just how we get the tax,” he said

“I kind of like (the mix of income surtax and property tax) because it gives a little more leeway,” said member Jen Kaskey at the meeting last month. “If (the ag sector) gets really bad, it gives us a chance to move things a little bit. Valuations don’t necessarily mirror what’s happening economically in a timely manner.”

“If you have a bad year, you’re still paying property tax,” said member Jon Turnquist. “It doesn’t go away.”

PPEL funds are used for purchasing and improving grounds and buildings, constructing buildings or roads to buildings, purchasing or leasing technology and equipment, purchasing transportation equipment for students and other primarily “brick and mortar” related expenses.

A 10-year extension to the 67-cent property tax levy would provide an estimated maximum of $2.5 million to use for project costs. That rate is half of the legal maximum rate for PPEL levies ($1.34).

That rate is assessed to property owners based on the county assessed, taxable value of property. It is not based on the market rate of property.