School board chair Kevin Marcum explains his position regarding the proposed Nickel Tax

Posted July 17, 2019 at 11:28 am


In a recent vote, the Clinton County Board of Education put into motion the process of placing an additional tax on real estate and personal property owned by Clinton County taxpayers, for the purpose of building a new Clinton County High School facility.

Commonly referred to as the “Nickel Tax”, the proposed additional tax would be earmarked for use in the construction of new facilities as well as the renovations of existing buildings

Following that decision, as per state law allows, a separate movement was made by a group opposing the tax by the filing of an affidavit in the Clinton County Clerk’s office of the intent to circulate a petition that the group hopes gains enough signatures to block the school board form being able to simply enact the tax but instead, force the issue to a vote of registered voters here.

In order to force the issue to a vote, the petition would have to be signed by some 452 registered voters, a number that would equal 10 percent of the number of voters who went to the polls in the most recent general election.

With all of that said regarding the background of the so-called “Nickel Tax” issue, the members of the Clinton County School Board are hoping to be able to go forward with, one way or another, the additional tax with the intent of eventually seeing a new high school facility being build.

Currently, the facility known as Clinton County High School has nearly one-half of its history going back to the early 1960s when the west and north facing wings were originally constructed and used as Clinton County Elementary School, housing grades 1-7.

In the early 1970s, as the high school located near where State Farm Insurance is currently located, was reaching an age that it needed replacing, the then Clinton County School Board opted to do a renovation and addition project at Clinton County Elementary, constructing a new gymnasium as well as three adjoining wings for classrooms, a band room and an FFA Agriculture center.

Now, nearly 50 years after that addition was made to complete what has been Clinton County High School since the class of 1973 became the first graduating class from the current building, the process has begun that the school board hopes will result in a new facility for future students in grades 9-12.

The Clinton County News spent some time with Board of Education Chairman Kevin Marcum last week as he explained his stance on the proposed additional tax and the board’s hopes of seeing a new high school facility being constructed

Marcum was open with his comments and opinions, beginning with the issue of what he doesn’t like about the term “Nickel Tax” in the first place.

“They talk about a ‘Nickel Tax’ and that’s basically the name that has been put to this tax, but it’s actually going to be six tenths of $100, and the reason it’s like that is that the state has a formula that they go by,” Marcum explained, further explaining that the tax is only collected on real estate and personal property, not vehicles and taking into account that districts won’t be able to collect property taxes at a rate of 100 percent.

“I hate the fact that it’s called a ‘Nickel Tax’ and it’s going to be six tenths instead, and that sounds like a lie right off the bat and I don’t like that,” Marcum said during an interview Thursday morning.

The board chairman quickly confirmed that the hope of the board was in fact to see the construction of a new high school facility, explaining that because of the age and deteriorating condition of the current building, a major renovation project with additional needed classroom space, simply wasn’t feasible.

This is not something that I’ve jumped into and in five minutes decided we needed a Nickel Tax,” Marcum said. “I was actually kind of against it to start with because I didn’t know as much as I felt like I needed to know about it.”

“The idea of the Nickel Tax is if it is passed, the funds collected through the tax was matched by the state,” Marcum said. “I do not have the exact numbers on how it would be matched, but now there is not any language in the (Kentucky) budget that says they are going to match this and I just want people to know that.”

He continued by noting that while the state had inserted wording in its budget that would not guarantee the Nickel Tax levy would receive a state match, as the program was designed to do, he had been assured by a host of experts that the matching funding would, in fact, take place if the tax became a reality in Clinton County – either by the board vote, or through a public election, if that becomes necessary with the opposing petition.

“The experts who I have talked to for the past couple of years, and I’ve been told by several experts, including folks in the KSBA (Kentucky School Boards Association) and by folks in bonding companies and people like that who handle these tax funds, that we would get a match” Marcum continued. “They didn’t have any idea how much it would be at the start, but it’s something that I think builds over time.”

As for the petition that is circulating in hopes of forcing the issue to a public vote, Marcum said he just wants to make sure that the public is getting correct information about the tax levy and what it could be used for.

“I feel like it’s my responsibility to get the correct information out to the public. I feel like there might be some information floating around that is not exactly correct,” Marcum said. “I’m not saying that anyone is trying to do anything shady, they just don’t know what they don’t know.”

He repeated that the law specifically notes how the funds derived from the Nickel Tax – also referred to sometimes as a secondary Nickel Tax – could be spent.

“We have to have the Nickel Tax in order to build a new school building. Our bonding potential is really low,” Marcum said. “It’s getting to a point that we’re not going to be able to renovate or do any major work to our high school because it is so old.”

I’m really excited about this because I feel like it’s a great opportunity for us and our school district .

Marcum went on to explain that while the current facility looks in good shape from a vantage point that the public sees, in reality, there are some serious problems developing that will have to be addressed one way or another.

“We have some maintenance issues in that building that you can’t see from just walking around – you go in there and look around, and you don’t see anything wrong with the building, and I understand that,” Marcum explained. “If I didn’t know what I know from being on the board, I would probably be right with the people who are opposing this tax. I don’t blame them for doing what they are trying to do by putting the tax to a vote.”

Still, Marcum continued explaining that while the building might look good from a view in the hallways, the workings and utility service area of the facility are simply outdated.

“Every year it is a little bit more inefficient to use it – it is costing us more to keep using the building than it is worth,” Marcum said. “I’m trying to avoid continuing to do this. I know this process is going to take several years from start to turn-key getting into a new building.

“For instance – if we lose an air conditioning unit out there right now, it could cost hundreds and hundreds of thousands of dollars to replace it and that would put a really big strain on us,” Marcum said. “The units are all 20 years old and we have old boilers. Even replacing a AC unit is different now – if you have a five ton unit go out, you can’t just replace it with a five ton unit – you have to instead put in two, two and a half ton units. That requires new duct work new wiring and upgrading the panel box control units.”

While he noted that at this point in the process no one had actually talked to an architect or any builders about what a new high school might cost to build, he did have an estimate that he had developed from talking with officials from other districts and with the state.

“You are talking about – and this is just a ballpark estimate – probably $30 million project and it could go up the longer we wait,” Marcum estimated. “

He also added that at this stage it was also too early to have thought about a design or look for a new high school, and he would hope to be able to get the community involved when the project gets to that stage.

“We haven’t talked about what a new building would look like yet – I would want to involve the community in some of those decisions,” Marcum said. “That’s not something we’ve actually discussed as a board. I want ideas from everybody in the community when we get to that point.”

Still, he noted that he would hope the design of a new facility would lend itself to making the students eager to be there and a part of the school.

“You want something that the kids are going to love to come into,” he said. “You don’t want it to be a gloom and doom feel when they get there.”

As for where a new high school building would be located, he noted that the local board hadn’t really focused a lot on any location that might be available, although he did say that multiple potential sites were currently available.

“We’ve got a couple or maybe three or four places we would be interested in, but our main focus at this time is getting the Nickel Tax passed, and then we would proceed from there,” Marcum noted. “We would have to check on the ground and do test drilling to determine that they aren’t building on top of a cave or sinkhole, but that would be on down the road.”

He also noted that whether or not a new facility would be built on land adjoining or near the current high school, he did expect that at least in the beginning, the current high school athletic facilities would continue to be utilized.

“It’s my hope that a new high school would have a new gymnasium, but it’s my understanding that they are not building gymnasiums the size we have now when new schools are built – and that’ would be unfortunate. So what we might do, and again I’m just speaking in my opinion, not the entire board, I would hope we could build a gymnasium at the high school, but have our games and graduations and other large events at the old gymnasium,” Marcum said. “We have a baseball field, softball field, football field and the tennis courts now, and we would continue to use those facilities where they are now.”

He also noted that there is work that needs to be completed at the gymnasium, likely before a new school facility is even started – such as a new playing floor installed in the near future.

Keeping the new tax in place would likely be something that would continue until a new facility would be paid off, although he didn’t know how long that might be.

“I would assume we would keep that tax on until we don’t need the money any longer. That’s my goal,” he said. “I don’t want to tax for something that we might need 15 years from now. I just want to be able to pay our bills and pay a new school off. That’s my main goal. ”

He added that how long the tax might remain in place would be something that bonding experts would be better knowledgeable about answering.

Marcum also said he continued to look at the project realistically as a member of the school board, but he also remained optimistic about the outlook of getting the secondary Nickel Tax successfully passed and put in place.

“It’s not something that we’re going to be able to do quickly – we can’t just say okay the tax passed, we’re building a new high school, that’s not the way it works, it’s going to take a few years, maybe two or three years.” Marcum said. “We’re excited about this and I think once the dust settles, we’ll be fine.”

What Hoover, Wise have to say about a Clinton County Nickel Tax

Ultimately, the matching funding coming from the state would be determined by the state of Kentucky, it’s budget and the leaders in the Kentucky General Assembly.

The NEWS also reached out to Kentucky Senator Max Wise (R-Campbellsville) and Kentucky House Representative Jeff Hoover (R-Jamestown), both of whom represent Clinton County as a part of their respective districts.

While both agreed that there was no longer a set guarantee, as per specific wording in each Kentucky budget, that the state would match funding raised through a secondary Nickel Tax, they both also agreed that in all likelihood, that the funding match would be realized by the state.

Max Wise

“There is no guarantee of equalization by the state. KRS 157.621(2)(b) states that equalization of any nickels passed after April 27, 2016 is subject to available funding provided by the General Assembly. We provided funding in 2018 through HB 200 under the SEEK appropriation unit, but I will note the last sentence of the budget section pertaining to the recallable nickel (Retroactive Equalized Facility Funding), which does state that it was the intent of the 2018 General Assembly to not equalize future nickels,” Wise explained. “This is just intent language though, so they could be equalized in the 2020 budget.”

As for a percentage that might be matched by the state, Wise added that while the match could be funded at the full rate of 1.53, it could also be matched at a lower rate, especially during the first two years of the tax being in place.

“The equalization of nickels is a formula based on a the taxable property value within a school district on a per student basis compared to the state average. The state essentially makes up the difference between what a district brings in from local taxes and that state average, thus the term ‘equalization’. Wise said in an email response to a series of questions on the issue last week. “Like all other school districts, Clinton County already has a nickel in place and their’s brings in about $248,000 per year in local taxes with another $400,000 in state equalization funds. So another nickel like the one just past would be expected to bring in about the same from both local and state sources if the state was equalizing at 100%. It is important to remember though that for the last eight years or so, new nickels are only equalized at 25% during the first two years. This can also be seen in the HB 200 budget language for nickels that were passed in 2016 and 2017. For Clinton County, this would mean approximately $100,000 in state equalization funds per year in the first two years, if the 2020 General Assembly chooses to follow prior practices.”

Jeff Hoover

Representative Hoover also responded to a series of email questions on the subject last week, and many of his answers were similar to the facts that Wise gave.

“There is no guarantee, but…..the state has always equalized the nickel which a local district has adopted which was subject to recall. The legislature always puts language in the budget that it is the intent of the General Assembly that no school district adopting a equalization Nickel Tax will be equalized,” Hoover said. “That is safety net language for the General Assembly should circumstances require those districts not receive equalization funding such as lack of funds, political makeup of the legislature, etc, etc. However, since the equalization tax was adopted, every school district in Kentucky that has adopted the so-called “second nickel” has received equalization funds. No statutory guarantee, but we always have funded or matched.”

Hoover did, however, give an estimate as to the odds of a Clinton County secondary Nickel Tax being funded.

“I would say the odds are 80 percent to 90 percent the funds will be equalized by the state if the Nickel Tax passes,” Hoover said.

Hoover also further explained the formula the state would likely use in matching the funding, noting that in year one and two, the matching would be much less than in year three and beyond for as long as the tax remained in effect.

“A second Nickel Tax, that district will receive approximately 25 percent of their normal funds the first two years (planning and pre-construction years) and then beginning in the third year and each year thereafter, the district receives 100 percent match,” he explained. “Each school district’s equalization rate is different based on many factors such as student makeup, property value in that district compared to state average, etc, etc.

“So, in FY 2019, Clinton County schools generated about $250,000 based on their local nickel. However, based on the district’s equalization rate, Clinton County schools received about $400,000 from the state in matching funds. As a general explanation, this shows the property tax values and the number of students in the Clinton school district are well below the statewide average, but we receive much more than is generated locally.

“Since Clinton County schools received $400,000 in state equalization in 2018 based on their numbers, the district could expect to receive about $100,000 in the first two years after the tax is adopted (25 percent of $400,000) and they could expect to receive about $400,000 (100 percent of current) additional state matching funds beginning in year three after the tax is adopted and each year thereafter.