The Danville Board of Education is considering a tax rate increase because it’s facing a third year of reduced estimated income for its general fund, along with significant increases expenditures in the 2019-2020 school year.

The largest non-recurring expenditure facing the Danville Schools is a refund for tangible property taxes — a whopping $424,600 — to Wausau Paper Company.

At a special-called meeting Monday evening, the board met to discuss whether or not to increase property tax rate, something that it does every year, said board president Steven Becker. Board members were given several pages of the district’s financial information, including income and expenditures; historical tax rate date; financial impact data for the past 24 months; and current financial impact figures.

Danville Superintendent Tammy McDonald said, “We are currently in negotiations with their attorneys to set up a payment plan for them. … That’s a fairly large amount of money that we will have to pay back and we are hoping we can spread that over a minimum of two years, but that depends on the attorneys.”

And as far as the $424,600 pay-back to Wausau — board member Lori Finke explained that Wausau Paper “was wrongly classified as tangible property.” They were correct in seeking a refund because they had paid taxes on their whole inventory, “but they didn’t have to,” Finke said. “… Unfortunately they had already paid it for two or three years and now we’re having to pay it back.”

Other causes for the general fund to be “shrinking” are “huge” reductions in federal and state funding; exonerated property that was taken off the tax rolls, such as the property that the city purchased for the new fire station on Main Street, and when homeowners appeal their property’s assessed value; and homestead exemptions. Nearly $62,000 was taken off the school district’s budget due to exonerated property, McDonald said.

“We’re having to take on more of the burden because of the shrinking funding,” McDonald said.

The six tax rate scenarios that the board is considering include: compensating rate; compensating rate plus 2%; and compensating rate plus 4%, all with and without including property tax exonerations of property taken off tax rolls last year, according to a tax rate calculation worksheet presented at the meeting.

What this means to taxpayer is:

• At the compensating rate with exonerations, taxes would increase $2 on a home valued at $100,000; and $4 on a $200,000 home.

• Compensating rate plus 2% with exonerations for the same homes would be $14 and $28.

• Compensating rage plus 4% with exonerations would increase $39 and $78.

“We have worked to put ourselves in a really strong place (financially),” McDonald said. “We’ve been meeting our needs, but now we need to build back up that reserve where we can still be fine in an emergency…”