Revenue Neutral Rate Information
What does Revenue Neutral mean?
- Revenue Neutral is when a taxing entity budgets the exact same amount of property tax revenue, in dollars, for the upcoming budget year as they did for the current year.
- If a taxing entity plans to use more property tax revenue in the next budget year compared to the current year, even $1 more, they would exceed revenue neutral and are required to hold a public hearing.
- The Revenue Neutral Rate (RNR) is the mill levy rate to generate the exact same amount of property tax revenue as the year before, using the current tax year's total assessed valuation.
What is the mill levy rate?
- The mill levy tax rate is applied by taxing entities (city, county, school, fire district, library and the state) to raise revenue to cover their budgets and pay for public services.
- The mill rate of each entity (or jurisdiction) is multiplied by your home's assessed value to give you an estimated tax bill.
Why would taxing entities want to increase revenue?
- A taxing entity does not only increase revenue to provide new services; they often need to increase property tax revenue to provide the same level of service as the year before. (While the RNR law is an important step for budget transparency, it does not take inflation into account. As property values are rising, so are the costs of goods and services.)
- To provide our students with the same level of academic instruction (or better), it costs more.
- If USD 458 were to stay revenue neutral every year, we would have to provide this year's services, with this year's prices, on last year's budget.
What should you know about the USD 458 mill levy rate?
- School districts have a mill levy rate for each of the different funds in their budgets (i.e. USD 458 has a General Fund mill rate, Supplemental General (LOB), Capital Outlay, Bond & Interest, and Special Assessment (our portion of the Basehor Blvd. sewer)).
- Kansas Statute General Fund Mill Levy (KSA 72-5142) says tax shall be levied at a rate of 20 mills, which means that because of our increase in assessed valuation, the revenue neutral tax rate would be 17.887, but because of state statute, we must keep it set at 20 mills.
- The USD 458 LOB mill rate will increase slightly from 10.905 mills last year to 11.045 mills this year to allow us to provide academic instruction and services to our students that is equal to or better than last year.
- Capital Outlay allows the district to take care of things like roofing, carpeting, painting, etc. in our buildings. We are keeping this rate the same as last year at 6.506, which means we are choosing to keep this lower than the 8 mills allowed.
- Bond & Interest will increase slightly from 20.745 mills to 22.010 for the purpose of making bond payments for previous voter-approved bond issues.
- Special Assessment is the fund used for the Basehor Boulevard sewer, and with the increase of assessed valuation, we were able to drop the mill rate on this fund to 0.069 vs. 0.079 last year.
- Overall the District's mill rate was 58.235 last year and this year it will be 59.630, an increase of 1.395 mills.
USD 458 will hold their RNR hearing before their regularly scheduled Board of Education meeting on Monday, September 12. Accountability reports can be found on our website at www.usd458.org.