In a Wichita Eagle article City leaders cut short trip to talk about TIF, reporter Deb Gruver writes: “Susan Arensman, a spokeswoman for the school district, said the project would not affect schools.”
The context is that the City of Wichita is considering the creation of a large tax increment financing (TIF) district in downtown Wichita. The main feature of the TIF district is that as property values rise, the extra property taxes will be used to pay off bonds the city issued to benefit the TIF district. In non-TIF developments, the rising property taxes would go to the general city fund, as well as the county, school district, and state of Kansas, as well as other bodies that somehow get a share of Wichita property taxes. But with TIF districts, these districts don’t benefit from the rise in property values and the rising tax revenue that should accompany that.
Ms. Arensman’s statement, therefore, is quite confusing. What, funding doesn’t affect schools? We’re told over and over from many sources that schools don’t have enough money.
In Wichita, for 2007, the mill levy was 118.050, with 53.238 mills going to USD 259, the Wichita public schools. That’s 45 percent of the property tax paid in Wichita going to the Wichita schools.
But it’s not quite that simple. Through a complicated mechanism, Kansas allocates tax money to school districts across the state, so there’s not necessarily a direct correlation between the property tax paid by residents of USD 259 and what the Wichita school district actually receives. See K-12 Education Finance: A guide to understanding the school finance formula.
But some of the property tax generated locally absolutely stays right here to fund Wichita public schools. The “local option budget” does. That’s the tax that the district raised in August 2007. And, I believe the 7 mill capital budget stays right here in Wichita, too.
So when the City of Wichita grants tax favors and excuses property from the tax rolls through the creation of TIF districts, it absolutely affects the Wichita school district. As the district always feels that it doesn’t have enough money to do its job, here’s a way it could stop the loss of the tax dollars that feed it: don’t agree to the formation of TIF districts in Wichita.