The recently passed recallable nickel tax has Middlesboro residents researching the issue. Middlesboro Superintendent Steve Martin recently spoke about why the nickel tax is important for the students in his district.
First, Martin stressed the sole use of the tax money would be for improvements to the school’s buildings.
“This tax has to be used for buildings and construction,” said Martin. “That is the law, that is the regulation and that is all it can be used for.”
Martin said if the tax goes into effect, the money will be kept in a separate account.
Joseph Nance, a representative of Ross, Sinclaire and Associates, LLC., spoke on behalf of the Middlesboro Board of Education at the public hearing held on July 3.
Nance explained, every year when any school district sets their tax rates they have two options. They can set the compensating tax rate or they can take a 4 percent increase. Nance said he researched the records and found that over the last decade, the board has chosen the compensating tax rate on eight occasions — a move which shows the board has been hesitant to raise taxes.
If the board chooses to implement the 4 percent increase every year, it is not recallable like the nickel tax. Since the nickel tax is state matched, it would be equivalent to several years of a 4 percent tax hike.
Nance explained, the recallable nickel is the only tax a district can levy to generate additional state revenue. He said all districts have to set aside a nickel’s worth of their existing tax base for a building fund and if the funds are raised in a manner other than the recallable nickel, they are not eligible for the state matching program.
Martin stressed this point, echoing what Nance said during the meeting, and explained how the state matches the money.
“This is the only way that we can get matched money,” explains Martin. “It’s not dollar for dollar. As near as my math goes it is 89 percent.”
According to Martin, the money generated from the nickel tax will first be used to upgrade the heating and cooling systems at the elementary school and repair or replace the roof at the high school. Martin says the fund will not be used for sports facilities.
Martin also pointed out the school system may be eligible for additional funding by imposing the nickel tax. In the past, the school system was not given the opportunity at extra state funding due to ineligibility, because they did not have an active nickel tax at the time. If the nickel tax goes into effect and the state decided to disperse extra funding to schools, Middlesboro may be able to receive part of the money.
The Middlesboro Board of Education will be meeting in the Middlesboro Middles School library on Tuesday at 7 p.m.
Reach Reina P. Cunningham at 606-302-0901 or on Twitter @ReinaDailyNews.