After a contentious public hearing Wednesday night, Newport’s board of education voted to take the lowest compensating tax rate of four proposals.
Of the superintendent’s four proposals, the winning rate was $7.68 per $1,000 of assessed property value.
The school district’s current property tax rate is $9.64 per $1,000 of assessed property value. Four proposals for the 2025 rate ranged from the compensating rate at $7.68 on the low end up to the highest proposal of $8.84. Though the district proposed a lower rate, because of increased property valuations this year, the district is expected to bring in more money and taxpayers may still see a higher tax bill.
Property taxes are broken down into several categories. The first and usually largest chunk of your tax bill is real property tax, sometimes referred to as real estate property tax. This is essentially a tax on everything you own that’s nailed down. For residents, this means houses and other real estate property. For businesses, this means office buildings and other buildings and facilities used to conduct business.
Tangible personal property, on the other hand, is another form of property that isn’t real estate. Depending on where you live, residents may not be taxed on personal property at all–this will vary by jurisdiction.
Depending on where you live, other tax-adjacent fees may apply.
How do property taxes work?
The board held a public hearing on Wednesday for its 2025 tax rate, and many residents voiced opinions on the school district itself, including its quality of education and how the money should be spent.
The district’s annual budget is roughly $37 million with real estate tax revenue making up roughly $10.2 million of that budget on average over the last three years. For the 2023/2024 year, with a tax rate of $9.64, the local general funds received were $10,342,745. In 2024/25, with the new, lower $7.68 rate, the local general funds expected is $10,901,808, an increase of $559,063.
The compensating tax rate what a taxing body needs to charge to collect the same amount of tax money on real property as the previous year. Depending on property values, the compensating tax rate can be higher or lower than the preceding year.
“For example, my house, if we just took the compensating rate, my personal taxes for the schools alone would increase by about 11% just based on the compensating rate,” Newport Board of Education Member Aaron Sutherland said.
Newport Education Task Force (a subset of ReNewport) and EducateNKY board member Lynn Schaber said she didn’t see any rationale for increasing the rates more than the compensating rate. The education task force meets every two years to do reports on the district.
“I would even hope that the board would go, ‘Hmm, I’m not sure we should really take the compensating rate, given how much we spend relative to all the other school boards,’ but that’s totally within your decision,” Schaber said.
One of the expenses Schaber is referring to is how much Newport Independent Schools spends per student. The district spends roughly $30,000 per student annually, which is higher than the state average of $18,000. Newport Superintendent Tony Watts said the district has many students who require special education, contributing to that high cost.
The district has just over 1,300 students enrolled.
For example, Watts said they may have students who require an adult with them all day.
“So, of course, instead of spending $7,000 per student on that kid, you’re spending 30 ($30,000) to 40 ($40,000), depending on the experience of the person you have them with,” Watts said. “So that presents an issue for us, a little barrier that we have to cross.”
Former Newport Commissioner Jan Knepshield has lived in the city since 1969. He said both of his daughters went through Newport schools. During the meeting, Knepshield said the thing that bothered him the most was the lack of conversation about the students themselves.
“Let’s start talking about and dealing with the children,” Knepshield said. “That’s what education is about, folks, not sitting here talking about tax dollars. We could spend what we’re taking right now per student and take almost all the kids, at least the high school, and send them to St. X (St. Xavier High School) in Cincinnati and give them one hell of an education.”
One reason the district proposed the rates it did was to help with a nearly $500,000 over-assessment from the property valuation administration. Watts said the district found out it had been over-assessed in January and had to return nearly $500,000 in property taxes collected.
Newport Independent Schools is not the only one with a PVA error. Over in Kenton County, Erlanger discovered a $49 million error in a personal property tax assessment. That $49 million was removed from the city’s 2023 tax rolls and will not be in further tax rolls, which means the tax rate set last year was lower than it should’ve been. The error cost the city $97,000.
Watts said the district hopes to recoup the money it lost from the PVA error through the new tax rate.
The district intends to use the money toward its stadium project, which residents also did not agree with. The football stadium has already received new bleachers, but phase two would bring new concessions and restrooms, and phase three would include locker rooms. Watts said that costs for the stadium project are around $5 million.
After those needs, Watts said the district needs new desks, a new gym floor and bleachers in the high school.
“I think, with our academics and the performance of our schools in Newport, I think the taxpayers might better support it if the money was spent on resources for their education, not a locker room,” Newport resident Alex Watkins said.
Northern Kentucky’s highest rates of economically disadvantaged youth, based on 2022-23 data, were in the river city districts. Newport Independent was at the top of the list at 90.3% of students considered economically disadvantaged. The district also has the lowest overall state accountability rating for its high school in 2022-23, per the data, and Newport is rated at the bottom for overall middle school performance.
Learn more about the state of Newport and other NKY schools here.
Aside from chair Ramona Malone (who said she would have taken the compensating rate plus 4%), all board members proposed taking just the compensating rate.
“We have students who are doing great, and they need you,” Newport Board of Education member Ed Davis said. “They need your support. They’re not going to excel when everyone looks at them as if they’re inferior students. They’re not.”