What is a Prop C Waiver and Why Does the District Need This?

Dr. Cummins, Neosho School District Superintendent, provided this overview regarding the need for the Prop C waiver.

What is a Prop C waiver and why does the district need this? Because it is a critical component of the ballot measure the Neosho School District is putting forth in June, this article will hopefully provide some insight into what Prop C is, how it impacts our school district, and some data
regarding other schools that do not have the waiver.

According to the University of Missouri Institute for Public Policy, via BallotPedia, the state of Missouri passed Proposition C in 1982 by an affirmative vote of 53%. The ballot measure raised sales tax by one cent to support schools and highway funds. It also required schools to reduce local property taxes by ½ of the sales tax revenues received. In 1998, Missouri passed a constitutional amendment (Amendment 2) which allowed school districts to set an operating levy no higher than $2.75 without a vote of the residents.

Neosho receives approximately $4.9M in Prop C revenues from the state each year. When placed into the Prop C rollback calculation, it produces a “rollback” amount of approximately 75 cents. So what is being rolled back?

The state provides school districts with an operating tax levy ceiling every year. This past year ours was $2.89. When the rollback is applied it leaves us at $2.14 ($2.89 minus $0.75). Since Amendment 2 allows districts to set their levy at $2.75 without a vote of the people, we annually raise our levy up to $2.75. This is where it has stayed for many years.

Presently in the state of Missouri, 461 school districts have a FULL Prop C Waiver (this is what we are asking the voters to allow us to have). The 461 school districts represent 89% of all school districts. The remaining 57 schools either have a partial waiver or no waiver. It is important to note that in the list of 57 schools there are seven that are our size or bigger. Those seven schools have an average total levy of $5.15; ours is $3.35. The average total levy for all 57 schools is $3.94. So their need for a waiver has been negated by other approved levy increases. For example, the Columbia School District only has $2.01 levied in the operating fund, but also levy $3.02 in the teacher fund, $0.97 in debt service and $0.10 in capital projects for a total levy of $6.10. Neosho shares the $2.75 over the operating and teacher funds and has $0.60 in the debt service fund for a total of $3.35.

So what does the Prop C waiver mean in actual dollars and what is the plan for the new revenue?

This present year, if we had been allowed to NOT roll back, it would have created approximately $447,000. Our assessed valuation was $326,000,000 and the rolled back amount was $0.14/$100 of assessed valuation ($326,000,000 x .14 / 100 = $456,400). At a 98% collection rate, that would have given us approximately $447,000. I ran the calculation over the last 17 years. The amount of revenue NOT collected over those 17 years was $7,700,000.

It is our intention to use the additional funds to support better wages for our teachers and classified staff members. This will allow us to be more competitive with area school districts.

Thank you for your interest in getting educated about the upcoming vote. If there is ever any information I can provide, please let me know. Best wishes!