Prop S Deep Dive: Budget & Finance

Kearney, Mo., Aug. 7, 2023: KSD’s Board of Education recently placed Proposition S, a proposed 45-cent property tax increase, on the Aug. 8, 2023, ballot. If Prop S is approved, the additional revenue will be used to help achieve the two highest priorities that were identified by our constituents during the strategic planning process:

  • Increase safety and security
  • Prioritize all employees by increasing compensation and benefits

We’ve already provided more details about how Prop S will help KSD hire three additional safety and security staff members and address staff salaries and benefits if it is approved on Aug. 8. This week, we’re focusing on how this measure will impact our budget and property taxes for our residents.

Focus: Budget & Finance

In Missouri, residential property is assessed at 19% of the county’s appraised valuation. If Proposition S is approved, the 45-cent increase will be applied to every $100 of the assessed valuation. Commercial properties are assessed at a higher rate.

Residential Property Tax Increase Formula:
(County’s Appraised Valuation x 19%) / 100 x 0.45 = tax increase due to Prop S

Estimated Impact on Homeowners

Appraised Value of Residential PropertyAssessed Value=19% of FMVAnnual45 Cent TaxMonthly 45 Cent TaxDaily45 Cent Tax
$100,000$19,000$85.50$7.13$.23
$200,000$38,000$171.00$14.25$.47
$300,000$57,000$256.50$21.38$.70
$400,000$76,000$342.00$28.50$.94
$500,000$95,000$427.50$35.63$1.17
$600,000$114,000$513.00$42.75$1.41
$700,000$133,000$598.50$49.88$1.64
$800,000$152,000$684.00$57.00$1.87
$900,000$171,000$769.50$64.13$2.11

Kearney School District currently has the lowest property tax levy among our 12 peer school districts. We will be in eighth place if Proposition S is approved. KSD’s levy rate was $5.3455 per $100 of assessed valuation in 2018. Our rate will be $5.2378 if Proposition S is approved. That means that our levy rate will still be nearly 11 cents less than it was five years ago.

Levy Rate Compared with Peer School Districts

School DistrictIncidentalTeacherDebt ServiceCapital ProjectsTotal
Raytown5.02940.00001.29060.00006.3200
Liberty4.02000.00001.54770.36005.9277
Blue Springs4.64110.00001.08750.00005.7286
North Kansas City2.41632.03001.11820.13005.6945
Independence4.11900.00001.31810.00005.4371
Park Hill4.79780.00000.49670.10105.3955
Lees Summit4.18890.00001.07000.05005.3089
Kearney (Proposed)4.04760.00001.19020.00005.2378
Excelsior Springs3.90850.00001.31770.00005.2262
Platte County3.14840.00001.48380.38715.0193
Grain Valley3.22710.00001.70000.00004.9271
Smithville2.18061.05001.10120.52004.8518
Kearney (Current)3.59760.00001.19020.00004.7878

Expenditures Per Pupil

School DistrictEx Per Pupil 2020-21
Park Hill$13,020
Raytown$12,368
North Kansas City$12,154
Lees Summit$12,114
Liberty$11,201
Blue Springs$10,919
Excelsior Springs$10,746
Platte County$10,729
Independence$10,677
Smithville$10,606
Kearney$10,298
Grain Valley$9,898

KSD Levy Since 2018

20182019202020212022
Incidental4.15534.02424.02453.58403.5976
Special Revenue Fund0.00000.00000.00000.00000.0000
Debt Service1.19021.19021.19021.19021.1902
Capital Projects0.00000.00000.00000.00000.0000
5.34555.21445.21474.77424.7878

There are two primary reasons the district’s tax rate has lowered over the last five years. The Hancock Amendment restricts school districts from receiving a “windfall” of profits. It restricts operating revenue increases to the lesser of the following: the percent of assessed valuation growth, the consumer price index (CPI), or 5%. This decrease reflects the constitutional requirement to lower the operating levy from $4.1553 to $3.5976 over the last five years. KSD has also voluntarily rolled back the debt service levy by $1.5115 over the last five years for a net revenue loss of $6,680,718 to maintain the 1.1902 debt service levy. 

KSD Levy Rollbacks

This is important as there is a recent trend of school districts with higher debt service levies seeking voter approval to transfer funds to the general fund for salary increases instead of voluntary rollbacks. Tax rates are simply a way to calculate how district revenue from local taxpayers will be paid by each individual taxpayer. Our tax rate is essentially a calculation of our allowed tax revenues in a given year (predetermined by the state) divided by the value of property within the district. State law governs our available local tax revenue every year based on a strict formula that does not increase by much, if at all. School boards can only increase the revenue they receive on existing property within a district by asking residents to increase the current tax rate via a special election. In other words, even as the value of the property within the district changes, revenues from local taxes will remain relatively close year over year. Because of growth in value within the community, our rate has decreased in recent years. This just means that the state formula capped revenues from existing properties by reducing our available rate.

Some people have asked why we can’t reallocate funds generated by the Proposition B zero-tax-rate-increase bond to help address the needs that will be addressed if Proposition S is approved. The simple answer is faculty versus facilities. Missouri schools have two types of tax levies: an operating levy for paying things like salaries and bills; and a debt service levy for paying back debt used to pay for facility improvements. The levies are separate and treated as separate by state law. Prop B, in 2022, was for the purpose of issuing debt to improve facilities and was done at a “no tax rate increase” to district patrons. Prop S is an operating levy question for use on salaries and staff hiring.

The funds generated through Proposition S will be dedicated to the designated purposes of enhancing safety and security and increasing staff compensation, as stated in the ballot initiative. The allocation of funds between the safety and security team and staff compensation will be based on the needs and priorities of Kearney School District. The specific breakdown of the allocation will be determined through careful planning and consideration by the district administration and the school board. We currently project that it will cost approximately $200,000 to hire three additional safety and security professionals and approximately $2 million to increase staff salaries.

You may also visit www.ksdr1.net/PropS to learn more about Proposition S.

Paid for by Kearney School District, Superintendent Emily Miller, 425 W. Washington St., Kearney, MO 64060.