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Hancock School board sets property tax

At the Hancock County School Board meeting held on September 23, the board raised the tax rate on real property from last year’s rate of 68.9 cents per $100 of assessed valuation to 72.9 cents per $100 of assessed valuation, and also set the tangible personal property tax rate at 72.9 cents per $100,000 of assessed valuation. The motor vehicle and utility tax rates remain unchanged. Due to a misunderstanding, last week’s story contained inaccurate information.

Several factors actually affect how much a homeowner pays in school taxes each year. To show an apples-to-apples comparison for the real estate and tangible tax rates of Hancock, Ohio and Breckinridge counties, the following example does not include any variables that may reduce a homeowner’s tax bill. It is simply the tax rates times each $100 of assessed valuation.

In Hancock County, both the real estate tax and the tangible personal property tax are 72.9 cents per $100 of assessed valuation. Assuming a home valued at $300,000 and tangible property at $200,000, with no deductions of any kind, a person pays $3,645 to the school system.

Daviess County set different rates for its real estate and tangible property tax.

The real estate tax is 71 cents per $100 of assessed valuation, and the tangible property tax rate is 71.5 cents per $100 of assessed valuation. Applying these rates to a $300,000 home and $200,000 in tangible property, again without any deductions to affect the tax paid, a homeowner pays $3560 to the school system.

Like Hancock County, Breckinridge County set the same rate for the real estate tax and the tangible property tax; the rate is 55.2 cents per $100 of assessed valuation for both taxes. Again, considering a total of $500,000 in real estate and tangible property combined, and with no deductions or exemptions to reduce the tax actually paid, a homeowner pays $2,760 to the school district.

Ohio County set different rates for its real estate and tangible property taxes. The real estate tax is 54.6 cents per $100 of assessed valuation, and the tangible property tax rate is 54.8 cents per $100 of assessed valuation. Applying these rates to a total of $500,000 in real estate and tangible property, and without deduction or exemptions applied, a homeowner pays $2,734 to the local schools.

How does the Kentucky counties’ rates compare to Perry County, Ind?

Indiana possesses a very complicated formula school districts use to calculate the taxes due the school system. The local school boards in Perry County, which are the Tell City-Troy Township school system, the Cannelton schools district, and the Perry Central school district, each set the real estate and tangible property tax rates, all of the exemptions, deductions and other variables make it impossible to make an apples-to-apples comparison.

In regards to the school districts on the south side of the Ohio River, Kentucky law allows taxing districts to automatically increase their revenue each year by four percent without holding a hearing, or setting a tax rate that brings in the exact revenue as the year prior, which is called the compensating rate. When the Hancock County Board of Education examined its compensating rate this year, that rate increased five-cents per $100 of assessed valuation to 73.9 cents. After discussing the issue, the board decided to set the real estate tax at one-cent below the compensating rate.

Hancock County Board of Education Superintendent Robby Asberry explained the rationale in a letter.

“We wanted to keep the taxes down for the community,” Superintendent Asberry said. “The new rate will bring in about $70,000 less.
“Due to a decrease in the Tangible Personal Assessments, our current tax rate would have resulted in a revenue shortfall of more than $400,000. The loss in Tangible Personal Assessments is a result of Covid-19 decreasing production/inventory and the sale or closing of local industries. Real Estate Assessments have increased by $9 million, which helped offset some of these losses.

“In August of 2019, the Hancock County Board of Education agreed they would refrain from approving or accepting any property tax rate above ‘Compensating’ for three subsequent tax years after the Nickel passage went into effect. The ‘compensating rate’ does not generate additional revenue for the school system, but only sustains the current funding level.

“The Board of Education has decided to take one cent below the Compensating Rate on real and personal property resulting in a decrease in funding for our School System. The school district has implemented cost-saving measures that will allow us to continue giving all students a high quality education despite this loss in revenue. This will help lessen the burden on our local taxpayers.”

By Ralph Dickerson

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