Kings Local Board approves financial forecast amid levy, 1% EIT and millage-reduction planning

The Kings Local Board of Education approved a financial forecast at its work session after Treasurer Matt Morrow briefed the board on revenue trends, staffing ratios and assumptions tied to a ballot measure that would impose a 1% earned-income tax and enact a 1-mill property tax reduction if passed.

Morrow told the board the district’s revenues have been largely flat while expenses — particularly personnel and certain purchased services — have continued to rise. He said the district modeled two scenarios: the baseline forecast with current revenues and an overlay that includes the proposed 1% earned-income tax (EIT) and a 1-mill reduction to property taxes, the latter to take effect Jan. 1, 2026.

The forecast matters because Kings Local’s elected board is planning for enrollment growth and ongoing costs tied to personnel and benefits. “We don’t have a crystal ball,” Morrow said, describing how the district used state modeling (based on 2022 collections data) and its forecasting vendor to estimate the EIT ramp-up and likely collections. He noted the state may provide updated data for 2023 by the end of the year.

Why it matters: The board framed the ballot plan as intended to stabilize district finances without creating an over-collection that would remove fiscal accountability. Morrow and other administrators emphasized prior cost-saving measures — which they quantify at roughly $8.2 million — and said the forecast assumes continued attention to hiring practices, health-insurance strategies and utility purchasing to limit expense growth.

Highlights and assumptions

- Revenues: Morrow said property-tax receipts show modest growth (about 8% over a five-year period) but flagged a near-term reduction tied to tax-rate compression after rapid valuation increases; he said a 7.4 mill reduction in the community tax rate effectively reduced what the district could collect and represented nearly $1,000 for the “average home” had the reduction not occurred.

- State funding: The district received a performance supplement and an enrollment-growth supplement, but Morrow said the regular state formula has trended the district toward the guarantee floor the state set in prior years.

- Personnel: Kings Local reported 564 full-time-equivalent employees in 2024, down from 573 in 2022. The forecast builds in two additional teachers annually to offset enrollment growth and assumes ongoing experience-related salary steps and negotiated increases.

- Health insurance and purchased services: Morrow said health-insurance renewals for 2026 are estimated at about an 8.3% increase and projected inflation in 2027; purchased services (student-specific services, transportation, utilities) remain a large, somewhat unpredictable cost category. Transportation contracts produced a one‑year increase of about 10% followed by 3% annual escalators.

- EIT modeling: The 1% earned-income tax projection uses the state’s methodology, which relies on 2022 data; the district’s vendor modeled a plausible ramp-up and a growth factor in the mid-30% range based on prior experience. Morrow stressed timing lags for receipts (withholdings and returns) that lead to a modest first-year collection.

Board discussion and public materials

Board members asked for clarification on timing and whether the slides would be posted; Morrow said the presentation and a more detailed forecast document (a multi‑page report filed with the state) will be posted to BoardDocs and the district website. Members praised the administration’s cost-savings work and asked for continued transparency on assumptions used in the forecast.

Vote and next steps

A motion to approve the financial forecast passed on a roll-call vote. Board members recorded in the roll call as voting “yes” included Miss Phillips, Miss Groff, Miss Callan, Miss Cowan, Mister Balfrom and President Skerrill. Morrow said the district will refile an updated forecast if the ballot issue passes and will work with the state and board on contingency plans if it fails.

Prognosis and caveats

Morrow warned that projections beyond 2029 are increasingly volatile. He also noted the state’s published EIT projection is based on older data and that updated figures could change expected collections. The board did not adopt any tax measure tonight; voters will decide the proposed 1% EIT and the board has discussed adding language to ensure a 1-mill reduction is implemented if the levy passes.

Ending

Administrators said they will post forecast documents to BoardDocs and the district website and will continue presenting refinements to assumptions to the board and community in the weeks ahead.