MSD Discusses 2018-19 Tax Rate


by Terry Rogers



On Monday, June 18, Sara Croce, Chief Financial Officer of Milford School District, presented the proposed FY 2018-19 tax rate to the Milford School District Board of Education. The new tax rate includes a reduction in school tax by 1.3 percent in addition to the 7 percent reduction the district approved for FY 2017-18.

“This is presented as of this evening,” Croce said. “Current funding structure requires districts to plan for and save to allow many years with no operational revenue increases. The state requires that districts keep a reserve to insure local obligations including payroll can be met in the event of a fiscal downturn. Last year we voted to use an aggressive progression to repay debt service and we continue to do that.” The aggressive progression will allow Milford to lower this portion of school tax by $0.0059 in Sussex County and $.0056 in Kent County.

The rate for Kent County will lower by $0.0646 and in Sussex County by $0.0246. Although the rate changes are different, the tax assessment is the same for each county due to differences in appraisal rates. Milford School District tax rates consist of four different components, including current expenses, debt service, match tax and tuition tax.

“The last assessment in Kent County was completed in 1986 and in Sussex in 1974,” Croce explained. “Newer houses are being assessed at higher values in both counties as there are building materials that were not available during the last assessments, like composite decking and granite countertops. There is a lot of talk about reassessing properties in both counties legislatively, but there is no indication there will be an updated assessment.”

Current expenses provide revenue to cover operating costs which include teaching materials, textbooks, technology, insurance, athletic academic programs as well as the local share of district teacher and staff salaries. This rate will remain the same for 2018-19 as the tax rate cannot be changed unless it is approved through referendum. Debt service provides revenue to pay principal and interest associated with bonds sold for major capital improvements. This covers expenses like new construction, additions and renovations. It will also remain unchanged for the upcoming year as it must also be approved by referendum.

Match taxes are set by the Board of Education and do not require referendum approval. The district has the option of assessing Minor Capital Improvement, Extra Time, Technology, Reading Specialists, Math Specialists and Reading Interventionist. Currently, Milford is only assessing the Minor Capital Improvement tax in order to receive state funding for building and grounds repairs and maintenance. This rate will be reduced by $0.0025 in Sussex County and $0.0009 in Kent County.

“This year, there is the option to add a match tax for a reading interventionist,” Croce said. “We have decided not to add this tax as we feel we can manage with the staff that we currently have.”

Tuition tax provides revenue to pay tuition costs of district students with special needs who require specialized services. The tax helps cover costs of special services Milford students receive out of Milford School District. Two years ago, unexpected expenses incurred due to special education services offered out of the district led to the board raising this portion of the school tax significantly. Since that time, the district has implemented strategies to stabilize the expenses incurred for out-of-district services and in-district program offerings have been expanded to lower costs. These efforts have allowed the district to reduce the tuition tax rate by $0.0569 in Sussex County and $0.0181 in Kent County.

Milford School District does not levy a capitation tax and has not done so since 2005. In order to implement this tax again, the district would need to go to referendum. The tax is levied on every resident of the district who is over the age of 18 but is levied against the property owner. Board member Hunter Emory explained that a capitation tax would not be levied against renters but would only be levied against those named on the county tax bill. Croce explained that if there is one person on the property tax bill, one capitation tax is levied. If there are two people, two capitation taxes are levied. They are not levied against renters, but only against the property owners.

“The state FY2019 budget proposal did not restore the state funds we lost in 2018,” Croce said. “Last year, we lost $728,789.71 in state funding. This year, there is more certainty in the state budget which we did not have at this time last year and it appears the state budget will not impact our local tax rates.”

There will be a public meeting regarding the new tax rate on Tuesday, June 26 at 6 PM at Lulu M. Ross Elementary School. The board will vote on the new tax rates on Monday, July 9, 2018. The slides presented by Croce are available on the district website under the Board Documents tab for the June 18 board meeting. Questions can also be referred to Croce or Superintendent Kevin Dickerson at 302-422-1600.



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