Guest Commentary: Dr. Dickerson addresses concerns over increased taxes

This is a guest commentary written by Milford School District’s Superintendent Dr. Kevin Dickerson in response to the comments made at the regular board meeting Monday, Sept. 19.


Thank you to those attending the Sept. 19 school board meeting.  We appreciate your critical feedback and questions.

For those not attending, the comments that I made at the beginning of the meeting are located at http://www.milfordschoodistrict.org.

There were multiple questions posed during the evening.  We captured questions, from the media’s and our notes, and below are responses from our team.

In addition, we will hold informational sessions, with time available for question and answer, regarding the tax rate on the following dates and times:

  • Friday, Sept. 30 at 10 a.m. in the old Milford Middle School Board Room (Lakeview Avenue);
  • Tuesday, Oct. 4 at 10 a.m. in the old Milford Middle School Board Room;
  • Tuesday, Oct. 4 at 6 p.m. in the Milford High School cafeteria;
  • Monday, Oct. 10 at 6 p.m. in the LuLu Ross cafeteria.

As always, we will make time to discuss the tax rate for those having questions and wanting us to discuss individually – please call 422-1600 and we can discuss over the phone or set up a time to meet with you.  Thank you again.

Why did you not know about the increase in out-of-district services before the referendum?

The 2016 school year projections were done prior to the setting of the tuition tax rate in June 2015.  Our students and their needs are not static.  Needs for services of students change, students move in and out of the district, and disability identification does not follow a pattern.  There isn’t necessarily a timeline or pattern as to when students will need certain services or for when students needing specific services enter our district.

Throughout the school year, we had an increase in the number of students identified for services provided by our most expensive service placements, families requesting evaluations of their students and young children referrals from outside agencies.  There were also cost increases for some services, including an increase by one of our largest service providers.  Bills for tuition-based services are received by the district after the first of the year.  Some of our tuition bills were received in early spring through the end of May; costs of certain placements were not known until the bills were received in the spring.

Can you outline what these costs were for and the trends for this part of the tax?

Tuition tax funds provide a range of services and educational settings for students.  All of our tuition-related expenses follow the guidelines set by the state.  The main driver of the increased tuition-related expenses was the increase in expenditures associated with students attending specialized schools to access certain programs to meet their individual needs.  Locating specialists to offer specific interventions and supports requires a network of providers with a range of skill sets.  We access out-of-district specialized providers and schools to service a range of needs; intellectual disabilities, emotional disabilities, hearing impairments, blindness, autism, speech and language impairments, traumatic brain injuries, rare genetic disorders and other disabilities.  We also access programs that provide behavioral analysis interventions to meet the needs of our students with more intensive and complex needs.

Our total number of students served in out-of-district special needs placements has steadily declined over a ten-year period (from 112 in 2007 to 97 in 2013 to 86 in 2016) as we have increased supports within the district; however, costs to support student needs have steadily risen.  Not the total number of students receiving out-of-district placements, but more students requiring access to higher cost services was the biggest factor for the increase in expenses.  We have numerous students receiving tuition-funded services in a few of our state’s most expensive out-of-district specialized schools.  Though approximately 90% of tuition-related expenditures in 2016 were for servicing students with special needs, tuition funds also are used to fund out-of-district alternative school services for regular education students experiencing behavioral issues and participation by advanced students in the Academic Challenge program to access Delaware Tech and University of Delaware coursework at the Delaware Tech-Owens campus.

Tuition-related expenditures were approximately 2.0 million dollars in fiscal year 2013, 2.14 in 2014, 2.17 in 2015 and 2.67 in 2016 (this expenditure would have been closer to 2.9 if not for a bill being waived by a provider).  The current tuition tax rate increase was a result of not enough funds (approximately 2.1 million dollars) being collected through tuition tax for 2016 expenses and 2017 tuition expenses projected to exceed 3.0 million dollars.

Why are children with special needs sent to other districts?

We are required to hold, at a minimum, annual IEP (Individualized Education Program) meetings to make determinations regarding student needs and the appropriate educational setting for each student.  A team of educators, families, advocates, related service providers and administrators convene as an IEP team.  A valid explanation must be provided about the extent, if any, to which the student will not participate with nondisabled students in a regular class.  Of note, our 2015-16 special education percentage (13.9%) was lower than the state average (14.4%) and lower than almost all other downstate Delaware schools.

In addition to the previous question’s response, Delaware public schools access a range of special programs depending on student needs.  Federal law dictates that every student be served in his or her least restrictive environment placement.  For every student, the least restrictive environment is a regular education classroom with typical peers.  Special classes, separate schooling or other removals of students with disabilities from the regular education environment occur only if the nature or severity of the disability is such that education in regular classes cannot be achieved satisfactorily for the student and is in accordance with the student’s IEP.

What determines when children with special needs are sent to other districts? 

In order to move a student to a more restrictive setting, the IEP team is required to collect six to eight weeks of data demonstrating that even with accommodations and supports, the severity of the disability does not allow the student to achieve satisfactorily.  At the end of the data collection, the team reconvenes and can discuss the potential for educating the student in a more restrictive placement.  Teams do not move students from a regular setting to an out-of-district separate school setting until students engage within multiple other settings in between and the appropriateness of each setting is evaluated.  Residential settings require demonstration to the state that all settings have been exhausted and even a separate school setting is not appropriate.

When a student transfers to Milford from another district (in-state or out-of-state) and the IEP is current and valid, we are required by law to ensure that we provide the same type of setting to the best of our ability.  However, we do convene an IEP team to review the entire IEP, and the student’s needs, in order to determine that an out-of-district referral remains appropriate.

Does the district have any control over a child with special needs being served within the district or being sent outside?

The district must support placement decisions made by IEP teams.  State and local funding for IEP services are provided based on needs, supports and services identified in the IEP.  State law requires that adequate resources are available to implement the IEP.

Has the tuition tax been raised before?  Has it ever been lowered before?

The rate has fluctuated both up and down to accommodate projections for the changing population of students that the funds serve.  The annual setting of the tuition tax enables the district to estimate and determine the amount of tuition tax needed as well as adjust the prior year estimate.  Maintaining a higher tuition tax rate during previous years would have helped build a reserve that could have absorbed, at least partially, a rise in expenses such as those experienced during the 2015-16 school year and projected for the 2016-17 school year.  For historical purposes, we lowered the tuition tax rate in 2011 (collected for projected fiscal year 2012 tuition expenses), lowered in 2012 (2013 expenses), raised in 2013 (2014 expenses), lowered in 2014 (2015 expenses), slightly raised in 2015 (2016 expenses) and substantially raised this year in 2016 (2017 expenses).  The rise in 2016 has been our largest increase.

Is the district’s special education services audited regularly?

Milford School District conducts internal audits of all student IEP’s on an annual basis and has a multi-tiered system of review for all out-of-district referrals.  On an annual basis, the State Department of Education audits the district and the state is audited by the federal government.  The state conducts fiscal audits of expenditures utilized to meet the needs of special needs students.  The state audit system tracks identification practices, along with placement determinations to ensure that students are not “over-identified” in any specific disability category or are not routinely placed in more restrictive environment.

Are the district’s finances audited regularly?

The district is audited multiple times throughout the year for various reasons by the state.  The district has a construction audit annually which looks at any major capital funding and expenses. The district also goes through a local tax rate and revenue audit that looks at how the tax rates are set and ensures compliance with Title 14 of Delaware Code.  All audit reports are posted on the district’s website under finance reports, audit reports.

Is there a ceiling on how high the district can raise the taxes they control?

All tax rates and revenue collected by those taxes must be set in accordance with Title 14 of Delaware Code.  While there is no ceiling to the funds that can be collected, these funds are audited and must be collected to meet the purpose for which they are authorized.  As an example, funds collected through tuition tax cannot be used for any purpose other than allowable tuition-related expenditures.  The district must maintain detailed records of the students, their placements or special accommodations, and bills received by the districts serving those students.

Who pays for out-of-district student costs? 

If a student who resides in the Milford School District has needs that require a placement in another district’s special school or program, our district must pay 100% of the cost for that student.  The state portion of the student also follows.  If a student’s needs are so severe that they require a residential facility, the state funds 70% of that cost and the district of residence funds 30%.  For some students, the cost for 30% of that placement can exceed $100,000.

Taxpayer payment plan information:

Kent County (302-744-2536) and Sussex County (302-855-7831) tax offices allow property owners to set up a payment plan for the property tax due September 30, 2016.  Residents can contact the tax office for their respective county to discuss payment options.

Clarifications regarding the components of the tax rate:

The overall school tax rate is based upon assessed value of property and is expressed in dollars and cents per $100 of assessed value.  The total rate is comprised of four separate tax rates including current operating expense, tuition, debt service and match tax.  Current operating expense can only be increased through referendum.  The current operating expense rate had remained the same for eleven years prior to this year’s increase.  Tuition is set annually by the district.  Debt service is set by the district to provide revenue to pay principal and interest associated with bonds sold for major capital improvements such as new construction and renovations.  Match tax includes several allowable taxes including minor capital improvement, technology, extra-time programs and content specialist teachers.  This tax allows school districts to obtain local funding to match state funds for a common purpose.  The district only assesses the match tax for minor capital improvements.  School districts also have the ability to levy a capitation tax that assesses a rate for every resident of the school district who is over the age of eighteen.  The district does not assess this tax.

Equalization of tax rates in Kent County and Sussex County:

Districts, such as Milford, that encompass property in two counties use the Assessment-to-Sales Ratio Study for Division III Equalization Funding report as a means of “equalizing” tax rates across counties so that identical properties in Kent County and Sussex County are taxed the same.  Of note, Sussex County properties have not been reassessed since 1974 and Kent County properties have not been reassessed since 1986.

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