Mayfield Schools’ Gas Well Workshop

Although I was out of town on April 14th, I was able to catch a video rebroadcast of the Mayfield School Board’s gas drilling workshop on tv last night.

The Mayfield Schools community owes a debt of gratitude to the many residents who attended that meeting and who spoke out clearly and passionately against drilling gas wells on school district property. Thank you, thank you.


Let’s Talk Truthfully About School District Taxes, Revenue and Revenue Loss

The Mayfield school district’s main revenue comes from two sources: state/federal subsidies and property taxes. The school district receives two different types of resident-paid property tax revenues: 1) a relatively small proportionate share of property tax revenue is derived from un-voted “inside” millage; and 2) the majority of the school district’s property tax revenue is derived from voter-approved levies.

The “inside” millage property taxes are figured by multiplying assessed property values by a legally prescribed millage amount (it used to be a very modest 7 mills). The amount the school district collects in “inside” millage taxes fluctuates each year, along with assessed property values.

The school district’s levy-derived tax revenue (the majority of its tax revenue) is different; the levies provide the school district with a guaranteed $$ amount of property tax revenue each year--- regardless of what’s happening in the real estate market. In essence, the actual millage amount that is applied to assessed property values is adjusted as necessary each year, to produce the $$ amount of taxes that voters have approved paying to the school district.

Because the majority of its tax revenue is not impacted by changes in local property values/assessments, the school district sits in a very different position than surrounding cities and municipalities, which have experienced significant drops in revenue as a result of the recent downward property reappraisals.

Unlike the cities, the school district will continue to collect the same amount of voter-approved property tax $$ this year and every other year in the future, no matter how long the current economic recession lasts.

Several school board members stated that the main reason the school board was considering putting gas wells at the middle school and the high school was to make up for the elimination of an additional small revenue source: tangible personal property taxes. (The legislature made the decision to eliminate that tax several years ago, during the prior governor’s administration.)

I have to admit that I was very confused by that justification for drilling because board members admitted during the April 14th meeting that the state legislature has authorized paying public school districts additional $$ to match their lost tangible personal property tax revenues.  Once again, those payments place the Mayfield Schools in a much more favourable revenue position than surrounding cities and municipalities, who do not receive similar payments-in-lieu of tangible personal property taxes.

All of this leads to several troubling questions:
1. Is the school board really going to base its drilling decision on speculation about financial contingencies that may never come to pass?
2. Given the school district's more favorable financial position vis a vis surrounding cities, is the justification offered by school board members for drilling gas wells on school district property really worth the price that the school district will pay, in terms of loss of community support?

end