FUD#5-Solar tax revenue will not help schools and taxpayers

Solar opponents continue to try and create Fear, Uncertainty and Doubt about Utility-Scale Solar. Our Mason County school superintendent makes this claim “The tax benefits they claim are bogus. Any increase in property value taxation created will result in LESS money coming in from the schools from the state. Chay Ritter (Kentucky Department of Education) just this week stated that the “under the SEEK formula, when property assessments increase in a county, the amount of state funding to schools decreases. That usually means districts are forced to increase the local effort (raise taxes). “

Read more about the exact impact Solar property tax increase will have on Mason County Schools including change in SEEK funding from KY.

Kentucky’s SEEK funding is without doubt complex. The Prichard Committee has the best explanation I was able to find.

The short version is that in 1990 Kentucky opted to ensure that every school in the state had the minimum resources to educate each student in each public school district. Here is the 2021 – 2022 SEEK Forecast for Mason County Schools.

The critical points are that the SEEK State amount for Mason County = $8,009,886. When the local tax rate is constant, as local tax revenue increases, the state contributions drop an equal amount. This must be the basis of Mr. Ross’s claim. I would point out that “State” money does not fall from the sky and that we are KY taxpayers and should realize that SEEK money is not FREE.

The average assessed property value of Mason County farmland is $795. Utility-Scale Solar land with an annual lease payment of $650 will be assessed at $9,285.71. See detailed explanation of calculations

At the current school tax rate this increase in assessed value of Utility-Scale Solar on 6,000 acres (less than 4% of Mason County’s farmland) will generate over $704,000. This does not include the $662,000 injected into other local tax districts. Mr. Ross is correct Mason County Schools will not have any more revenue, as the SEEK funds from the state will drop by $704,000. But can anyone doubt that Mason County citizens will benefit?

Only Utility-Scale Solar increases above 68,241 acres (43% of Mason County farmland) start to add to the total net revenue flowing to the Mason County Schools. This is when local taxes would completely offset State SEEK funds. (I could find no school district in KY that receives $0 SEEK funding so this is probably unattainable) However, I believe reducing our dependence on state funds (which we all pay for in the end) is really the way to decide if our goal should be to work to decrease or increase local property values.

If we are to believe two of Mr Ross’s propositions:

  • Decreasing property tax base is desirable because that helps the school district maximize SEEK funding
  • Utility-Scale Solar will drive neighboring property values to near 0 and thus drive down the total tax base

Note I reject both of these premises. However, if you accept them, do you also believe that encouraging utility-scale solar will help Mason County Schools receive more SEEK funding. Oh, and do you also hope no other new business comes to Mason County, for fear their economic activity will also reduce the SEEK funds KY sends to Mason County?

Mr. Ross quotes “That usually means districts are forced to increase the local effort (raise taxes).” but I see nothing to support that premise. It is true that SEEK funding allows counties to keep increased income that flows from higher tax rates. However SOLAR will add few if any additional students, so unlike a new industry that brings a large number of new families to the district and thus requires more educational services solar should not increase the school districts expenses.

I reject this “state money is free” mentality. Rather I believe all Kentuckians benefit when together we increase environmentally sound economic activity. We must work together to fund our future not each strive to let someone else contribute to our common good.

SEEK Calculation for all KY Counties