Milford School District hears preliminary tax rate proposal

Betsy Price Education, Headlines

For the fifth year in a row, Milford School District’s preliminary tax rate proposal reflects a reduction in the school tax. Sara Croce, Chief Financial Officer, provided the district with a breakdown of the current tax as well as what she expects the proposed rate to be in FY2021-22 may be.

“Our current expense tax provides revenue to cover our operating costs and no changes can occur to this rate without referendum,” 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 we keep a reserve to ensure local obligations including payroll can be met should there be a financial downturn. Our current expense tax rate was set by referendum on October 6, 2015 and it will remain the same for FY2022.” The current tax rate is $3.2188 per $100 in Sussex County and $1.1390 per $100 in Kent County.

Debt service is also set by referendum and provides revenue to pay principal and interest for bonds sold for major capital improvements. The rate fluctuates annually depending on bond payment schedule. The revenue to cover Milford School District’s debt service for FY2022 is $1.25 million. This year, the proposed rate is $0.4580 per $100 in Sussex County, down from $0.4747 in FY2021. Kent County is $0.1621 per $100, down from $0.1680 in FY2021.

“The only Match Tax we collect in Milford School District is the Minor Cap Match Tax,” Croce said. “We must assess this Match Tax for Minor Capital Improvement to receive the 60 percent state share for those improvements. We are still awaiting allocations through the State Bond Bill to determine what our district share will be.” It is estimated that the Match Tax will be $0.1001 per $100 in Sussex County, up from $0.0927 in FY2021 and $0.0354 per $100 in Kent County, up from $0.0328.

Tuition Tax is paid for services to student with special needs, both within and outside the district. The district has continued to implement special programs within the district to try to reduce this tax burden. The proposed rate is $1.0259 per $100 in Sussex County, down from $1.0644 last year. The Kent County rate is $0.360 per $100, down from $0.3766 the previous year.

Milford does not assess Capitation Tax and Croce explained that because they are still waiting for the allocation for Minor Capital Improvements, the final tax rate is still pending. In addition, the proposed FY2022 operating budget from the state does not restore loss of funding from FY2018. In FY2021, the loss was $736,676.13, a share that changes each year. The district will provide a budget reduction plan to the state to offset the loss of those funds.

“Because our district is split between Kent and Sussex, an assessment-to-sales-ratio study is used to equalize tax rates,” Croce said. “A formula is applied so that an identical property in Kent or Sussex County is taxed the same. Assessed values in Kent are higher so even though the rate is lower, the tax is the same. It is also important to note that the value of your home has not correlation to the assessed value. If your home is on the market for $300,000, you may have an assessed value of $25,000. Assessed value can be found by searching your name on the county websites.”

Once the state provides final information to the district, the total proposed tax will be presented to the board for approval.

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