Dr. Fletcher's Focus -- March 2017

Building A New School:  Q & A on the Recallable Nickel Tax

            TAXES.  It is hard to say the word without getting a bad taste in one’s mouth.  We pay enough taxes.  What could possibly be a good reason for paying more taxes? 

            In February, the Lawrence County Board of Education members answered that question.  While no one on the board was happy about voting for the intent to add a nickel tax, each member realizes that it is time to replace the 63-year-old Louisa West Elementary facility.  In order to finance a new building, a nickel tax is necessary.  Furthermore, each board member respects the opinion of each resident in our county.  When you have a moment, please take the time to read the following questions and answers.  While each board member respects your opinion, it is the hope that you will see the reasons for the decision. 

  1. What is the “nickel tax?”

    The “nickel tax” phrase comes from the current funding structure for schools.  The nickel tax is the equivalent tax of 5 cents per $100 of assessed value on real estate and personal property that must be set aside by each school district for capital construction funding.  The amount is supplemented by the state for facility construction funding.  In Lawrence County, the nickel would generate $470,401 annually and would be supplemented, with state approval, at $0.87 on the dollar by the state equaling $410,062 annually.  (This $410,062 comes from the state budget, and not from Lawrence County residents alone.) In order for a school district to receive the matching funds, the district cannot vote for a lesser amount.

  2. Why is it called a “recallable” nickel? 

    This nickel tax is a voluntary tax that can be added by the local board of education.  However, there is a provision in the law that allows for a group of taxpayers to petition to have the nickel recalled, or withdrawn.  If the petition has enough signatures, the local board will need to decide whether to take the next step.  The board can vote to have a referendum placed in the next election.  Since 2017 is not an election year, the board would be responsible for paying the cost of having a special election.  (The cost of an election is roughly $30,000. Waiting until 2018, which is an election year, would actually delay the construction of a building another 2-3 years. See Question 8 for more details.)  The election results would determine if the nickel would be added, or recalled. 

  3. What impact would a nickel tax have for Lawrence County?

    A nickel tax would more than double the district’s capacity to bond for school improvements.  At present, Lawrence County has $7.25 million in bonding capacity for construction purposes.  With the additional nickel and state supplication, the County’s total capacity would rise to $19.58 million.  Even though it will generate a large amount of funds, it will cost the average property owner a relatively small amount.  The average property owner would pay less than the cost of a fast-food value meal per month.  For example, a property owner would pay fifty cents in taxes for $1000 of assessed property value; $5 for $10,000 of assessed property value; $50 for $100,000, and so on.

  4. Can the tax increase be spent on salaries?

    NO.  The funds from the nickel tax CANNOT be spent on salaries or instruction.  As stated in the hearing notice, 97% of the funds collected in Lawrence County will be restricted for construction purposes.  The remaining 3% will be used to pay for the collection of the taxes.  (The Lawrence County Board of Education pays the Sheriff’s Department 3% of the amount as a collection fee.)

  5. Why is this tax a property tax only?  Why can’t the school board tax income, revenue, payroll, or motor vehicles for construction?

    According to state law and regulation, the recallable nickel tax on property is the only option available to Lawrence County Schools that provides the potential for gaining matching funds from the state legislature (as described in Question 1). 


  6. Why does Lawrence County need a nickel tax?

    It is the responsibility of the board of education to provide the best environment possible for students.  In 2011, Louisa West Elementary was considered the 100th worst school facility in the state based on an evaluation conducted by the state department.  Since then, many of the schools on the list have been closed or replaced.  While there are many great memories in the building, Louisa West needs replacing.  Without the nickel tax, the district cannot afford to replace the school.  Also, state legislators will not consider any matching funds without a nickel tax.

  7. How does our tax rate compare to other districts?  Who else has a nickel tax?

    The following information shows the tax rates for Lawrence County and other districts in our area for 2016-2017.  The information for all districts can be found on the Kentucky Department of Education website.

    Rank  District Total Real Estate Tax Rate Nickel or other tax   Rank District Motor Vehicle
    1 Silver Grove Independent 131.7 NO   1 Anchorage Independent 110
    9 Raceland 98.6 YES   9 Pikeville 79.3
    13 Paintsville 93.1 YES   12 Paintsville 72.7
    22 Russell 83.1 NO   19 Raceland 65.8
    25 Greenup County 81.9 NO   34 Magoffin County 57.6
    26 Martin County 80.9 YES (Double Nickel)   43 Elliott County 56.5
    40 Pikeville 71.8 NO   62 Floyd County 55.4
    46 Pike County 70 YES (Category 5)   65 Pike County 55.3
    58 Ashland 65.8 YES   81 Boyd County 54.7
    77 Boyd County 62.4 YES   101 Morgan County 53.3
    87 Floyd County 59.7 YES   109 Johnson County 52.5
    88 Morgan County 59.4 YES   112 Lee County 52.3
    97 Rowan County 56.8 YES   120 Ashland 51.4
    102 Magoffin County 55.4 YES   126 Russell 50.4
    104 Perry County 54.8 YES (Category 5)   132 Perry County 49.7
    106 Menifee County 54.4 YES   136 Greenup County 49.4
    119 Breathitt County 51.3 NO   137 Menifee County 49.2
    133 Lawrence County  49.2 NO   137 Breathitt County 49.2
    134 Johnson County 49 YES   145 Rowan County 49
    142 Carter County 46.5 YES (Category 5)   154 Carter County 47
    148 Bath County 44.8 YES   157 Bath County 46.4
    158 Elliott County 42.5 NO   165 Wolfe County 45.9
    172 Lee County 37.7 NO   171 Lawrence County  35
    173 Wolfe County 33.6 NO   173 Martin County 22.3


    If you were to drive through surrounding counties, several have added new facilities for their students.  Boyd County has recently added a brand new high school and is currently renovating their middle school.  Ashland has added new facilities for Project Lead The Way and science/technology classrooms.  Perry County has added a brand new elementary school and football field.  Students in southwestern Floyd County will attend a state-of-the-art high school in the fall.  Pike County students have some of newest facilities in our state.  Magoffin County has a brand new high school and athletic complex.  Rowan County’s facility plans have included a new middle school and renovations to both the high school and an elementary school.  What does each of these school systems have in common?  The people of their communities are paying a nickel tax, and the state government has rewarded each of them by matching the funds.   While the Lawrence County High School campus is one of the best in our region, Louisa West needs replacing.  Our kids deserve better.  Under Kentucky’s current funding structure, this will only happen with a nickel tax. 

  8. Can we wait to add the nickel tax?

If the nickel tax is not added in the fall of 2017, the next opportunity for matching funding from state legislature will likely not occur until 2020.  This would delay the replacement of Louisa West for another 2-3 years.  Even with the delay, under the state funding system, a nickel tax would still be needed to receive matching funding from the state department.


If you have any questions, feel free to contact Superintendent Fletcher at the central office.  The number is 638.9671.  You can always email @ robbie.fletcher@lawrence.kyschools.us or send a Twitter message directly to Dr. Fletcher@All_in_LC