WV Center on Budget and Policy > Blog > Tax and Budget > Eliminating the Personal Property Tax: Part 4 – What’s at Stake for Schools

Eliminating the Personal Property Tax: Part 4 – What’s at Stake for Schools

(Continued from Part 3 – published 12/19/12).

Nearly $1.5 billion in property tax revenue was raised in West Virginia during FY 2012, and West Virginia’s schools were by far the largest recipients of the revenue. County school districts collected a total of $967 million in property taxes, nearly two-thirds of the total. Overall, property taxes account for roughly 30 percent of school district funding.

Of the $967 million in property tax revenue raised by school districts in West Virginia, an estimated $299 million was raised through taxes on personal property. But, if personal property taxes were eliminated, school districts would not lose the whole $299 million, because of the way school financing works in West Virginia.

While property taxes are an important source of revenue for schools in West Virginia, they actually receive most of their funding from the state, through the school aid formula. The school aid formula determines the amount of funding each school district needs to operate, called the total basic allowance. Each school district then raises whatever revenue it can through its current property tax levy, the rate of which is set by the legislature and uniform throughout the state. A percentage of the revenue from each school district raised through the current levy, known as the local share, is deducted from the total basic allowance, and the state provides the remainder to each school district, which is known as the total state aid.

Last year, the total basic allowance was $1,579,583,138, while the local share was $380,935,932, meaning that the state sent $1,198,647,206 to the local school districts.

School districts can also raise additional revenue through excess levies, if approved by the voters. Revenue from excess levies, bond levies, and other levies are do not affect the school aid formula. 

So if taxes on personal property were eliminated, the revenue lost from school current levies would be partially replaced by the school aid formula, but the revenue lost from excess and other levies would not. The table below shows the potential revenue lost for each school district, after adjusting for the school aid formula.

School District Total Loss
Barbour $197,657
Berkeley $6,400,282
Boone $8,018,620
Braxton $665,815
Brooke $4,171,443
Cabell $10,716,553
Calhoun $251,144
Clay $381,202
Doddridge $2,505,224
Fayette $3,713,522
Gilmer $675,979
Grant $183,638
Greenbrier $3,115,697
Hampshire $143,520
Hancock $4,211,850
Hardy $151,888
Harrison $8,578,689
Jackson $4,173,938
Jefferson $3,405,377
Kanawha $17,864,266
Lewis $1,512,761
Lincoln $1,850,893
Logan $7,624,461
McDowell $5,939,262
Marion $7,140,768
Marshall $3,068,333
Mason $5,261,584
Mercer $3,126,567
Mineral $2,556,618
Mingo $5,640,918
Monongalia $8,923,830
Monroe $479,592
Morgan $617,119
Nicholas $2,026,644
Ohio $5,117,520
Pendleton $58,988
Pleasants $1,408,643
Pocahontas $77,649
Preston $1,545,557
Putnam $4,619,898
Raleigh $8,895,713
Randolph $1,000,288
Ritchie $1,135,177
Roane $259,398
Summers $48,772
Taylor $834,343
Tucker $127,883
Tyler $1,307,822
Upshur $1,671,235
Wayne $3,925,642
Webster $137,010
Wetzel $2,214,625
Wirt $253,918
Wood $6,839,752
Wyoming $4,786,928
Total $181,562,416

 Source: WVCBP analysis of State Tax Dept  and WV School Finance Data

Eliminating personal property taxes would cost the school districts $145 million in current levy revenue, but the school aid formula would replace about  $117 million, resulting in a total loss of about $27 million. However, the school districts would lose an additional $154 million from their excess and other levies, resulting in a total loss of $182 million.

According to the Office of School Finance, there were approximately 282,000 students enrolled in WV school in the 2011-12 school year. The table below shows the per student cost of eliminating personal property taxes for each school district. As the table shows, on average school funding would decrease by $644 per student. But in several counties, the loss is even more dramatic, with school districts losing well over $1,000 per student. The Doddridge county school district would stand to lose a devastating $2,143 per student. 

Schools in West Virginia have by far the most to lose from the potential elimination of the personal property tax.

School District Total Loss Enrollment  Loss per Student
Barbour $197,657 2,499 $79
Berkeley $6,400,282 17,720 $361
Boone $8,018,620 4,545 $1,764
Braxton $665,815 2,220 $300
Brooke $4,171,443 3,363 $1,240
Cabell $10,716,553 12,700 $844
Calhoun $251,144 1,122 $224
Clay $381,202 2,071 $184
Doddridge $2,505,224 1,169 $2,143
Fayette $3,713,522 6,827 $544
Gilmer $675,979 943 $717
Grant $183,638 1,887 $97
Greenbrier $3,115,697 5,247 $594
Hampshire $143,520 3,590 $40
Hancock $4,211,850 4,308 $978
Hardy $151,888 2,297 $66
Harrison $8,578,689 11,128 $771
Jackson $4,173,938 5,046 $827
Jefferson $3,405,377 8,845 $385
Kanawha $17,864,266 28,458 $628
Lewis $1,512,761 2,605 $581
Lincoln $1,850,893 3,679 $503
Logan $7,624,461 6,449 $1,182
McDowell $5,939,262 8,104 $733
Marion $7,140,768 4,778 $1,495
Marshall $3,068,333 4,381 $700
Mason $5,261,584 3,559 $1,478
Mercer $3,126,567 9,611 $325
Mineral $2,556,618 4,373 $585
Mingo $5,640,918 4,573 $1,234
Monongalia $8,923,830 10,731 $832
Monroe $479,592 1,921 $250
Morgan $617,119 2,617 $236
Nicholas $2,026,644 4,076 $497
Ohio $5,117,520 5,370 $953
Pendleton $58,988 1,065 $55
Pleasants $1,408,643 1,278 $1,102
Pocahontas $77,649 1,183 $66
Preston $1,545,557 4,600 $336
Putnam $4,619,898 9,631 $480
Raleigh $8,895,713 12,372 $719
Randolph $1,000,288 4,294 $233
Ritchie $1,135,177 1,578 $719
Roane $259,398 2,505 $104
Summers $48,772 1,551 $31
Taylor $834,343 2,395 $348
Tucker $127,883 1,053 $121
Tyler $1,307,822 1,419 $922
Upshur $1,671,235 3,867 $432
Wayne $3,925,642 7,448 $527
Webster $137,010 1,534 $89
Wetzel $2,214,625 2,844 $779
Wirt $253,918 1,010 $251
Wood $6,839,752 13,462 $508
Wyoming $4,786,928 4,229 $1,132
Total $181,562,416 282,130 $644

Source: WVCBP analysis of State Tax Dept  and WV School Finance Data 

 

 

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