School board mulls employee retirement unknowns
Prior to adopting a property tax rate that will remain the same as last fiscal year, the Woodford County Board of Education discussed how changes to the state's employee retirement system could end up costing local school districts more money. Specifically, board Chair Ambrose Wilson IV voiced his concerns related to the state shifting more of the retirement burden for classified employees to local school districts. Chief Operating Officer Amy Smith said school districts are already paying 19.18 percent toward employee retirement benefits, but board member Sherri Springate said she seen reports stating that a school district's employee match might rise to 32 to 36 percent. Until action has been taken by lawmakers, there's no way of knowing how much local districts will be asked to pay, Smith said. The district has historically been told the percentage of its match for retirees in December, she said. The district has set aside dollars to cover half the cost of $420,000 if all employees eligible for retirement did so, according to Smith. If action is taken by state legislators to shift more of the employee retirement burden to local school districts at a special session or during the 2018 regular session, adjustments could be made to the property tax rate in order to increase local revenue next fiscal year, schools Superintendent Scott Hawkins said. The board could have voted to increase the tax rate by 4 percent in 2017-18, but instead chose to keep the same rate as last fiscal year, which was the recommendation of Hawkins. "With the revenue being generated and the way we've managed our resources," said Hawkins, "we will be able to withstand any issues that we might have (related to rising retirement costs) for the next year." He said that if state legislators voted to shift a large percentage of the burden for retirement benefits to local school districts, about half of the districts in Kentucky would become deficit districts. "I don't know that they would do that," said Hawkins, who also acknowledged that changes will likely happen to state employee retirement. "We're being naïve if we don't think something drastic is going to happen" in terms of how much local districts will spend on employee retirement benefits, Wilson said. "I do think we need to be prudent and I think we do need to plan," agreed Hawkins. "I think right now there are so many unknowns . (in) five, six or seven months from now we'll know a whole lot more that can drive our conversation moving forward." The approved school tax rate of 66.4 cents per $100 of assessed property value will generate more revenue (about $400,000) "because (property) assessments went up, not because of a change in the rate," said Smith. She said school revenue has been bolstered by recent increases in property assessments, which have likely been driven by growth in new business (Kroger Marketplace) and industry (Lakeshore Learning and More Than A Bakery).