A nonprofit publication of the Kentucky Center for Public Service Journalism

Boone County Schools get $16M from company’s underpayment of taxes; will fund two projects

By Mark Hansel
NKyTribune managing editor

Boone County Schools recently received a very large, and very unexpected, increase in revenue.

Thursday night, the School Board voted unanimously to put a significant portion of those funds to use.

An audit by the Boone County License and Occupation Department revealed an error in the tax filing of a global employer with a significant presence in the county.

The error had been repeated over a few years and it was determined that the company had underpaid by several million dollars.

The County did not disclose the exact amount, but a January invoice report from the Boone County Fiscal Court indicates a transfer of $16,304,549.06 to the Boone County Board of Education.

This invoice from the Boone County Fiscal Court shows a transfer of more than $16 million to the Boone County Board of Education. The funds are from an underpayment in taxes by a large company with a significant presence in Boone County.

Boone County Administrator Jeff Earlywine offered a brief explanation of how the funds were discovered at the Feb. 11 Fiscal Court Meeting.

“We audited the net profits return of a very large company that has a presence in Boone County,” Earlywine said. “That audit did expose an error in their tax return. When we looked back, it was an error that had been repeated for a couple of years previously.”

Earlywine also explained the Fiscal Court’s role in the collection process.


“The Fiscal Court serves in a fiduciary role, a collection agent for Boone County Schools,” Earlywine said. “We collect their payroll tax that they levy on any employee that lives and works in the county. We collect their net profits tax return (and) it’s around $12 million or $13 million a year.”

On net returns, the County has a very low cap, so it collects for the Boone County School District, whose rate is not capped.

The net profits tax return funds are separate from the revenue schools receive from property owners in the county and have no impact on the calculation of that rate. 

Earlywine described the money as a “windfall” and no doubt it feels like one to Boone County Schools, but it’s actually income that it should have been receiving all along.

The discovery of the underpayment raises some questions, such as the name of the company, that unfortunately will go unanswered.

“When people make a business tax return, notwithstanding all of the personal information about the company, they may also submit a tax return, that’s why we would never disclose that,” Earlywine said.

In a subsequent conversation, Earlywine clarified that failure to disclose is not a choice, but that the County is prohibited from revealing the name of the company.

It would also be nice to know how long the company has been filing erroneous tax information and why the underpayment was so large.

Earlywine said that information is also privileged but added that it is believed to be an honest mistake.

So, how does a school district spend $16 million in unexpected revenue? With all of the funding challenges schools are facing, the list of needs outweighs even this significant sum.

In this instance, the School Board voted unanimously to provide some upgrades that are desperately needed and might otherwise never get funded.

Linda Schild, director of finance for Boone County Schools, confirmed the “extraordinary news” of the $16 million payment, $900,000 of which was interest.

The Boone County School Board voted unanimously Thursday to approve the allocation of almost $11 million for two major projects. Funding for the projects is the result of a $16 million tax underpayment by a company in Boone County (photo by Mark Hansel).

“A portion of those funds will be used for the new auditorium and some renovated classrooms at Boone County High and turf fields at all high schools,”  Child said. “The remaining funds will be used to subsidize any reduction in SEEK (Support Education Excellence in Kentucky) funding that is expected for next year.”

The SEEK funding program is a formula-driven allocation of state-provided funds to local school districts. The formula includes funding for transportation costs and special needs students as reported by districts.

While raw numbers suggest SEEK funding has remained consistent, there is evidence to indicate that due to inflation and other factors, more of the burden in recent years has been borne locally. 

Boone County Schools Superintendent Dr. Randy Poe was out of town Thursday, but said by phone that there is not enough money in the budget for everything that the schools need.

 “The SEEK formula doesn’t level equally,” Poe said. “We have not been able to turf our fields like a lot of other schools. Two of our facilities, Connor and Boone, are landlocked and some students have to participate offsite.”

Boone County Schools has explored other avenues to generate additional funding, including corporate sponsorships, but have been unsuccessful.

Outlines for the construction of a new auditorium and related upgrades, and the improvements to the athletic fields are included below.

Boone County High School – Additions and Renovation

This project is for construction of a new 400 seat Auditorium addition at Boone County High School on the south end of the campus between the baseball field and parking lot.  This addition will also include a Band/Choral Room and will tie into the back 1950s wing and have ancillary spaces associated with those  functions, as well as restrooms, concession, etc.  Part of this project will also be to repurpose the existing Auditorium into a Multi-Media Classroom and improvements to the front Lobby area.

The estimated cost of the project is $6.2 million.

Boone County Schools Turf Fields

This project consists of a retrofit turf field, with track replacement and track coating and striping, at Ryle High School.  There will be some minor drainage work incidental to removing and replacing the carpet and turf surfaces.  This project also consists of upgrades at three other locations – Boone County, Conner, and Cooper High Schools.  There will be a full track rebuild with rubber coating at Boone County and Conner High Schools, while the track will remain at Cooper High School.  This is for removal of all topsoil, installing a full underdrain system, recrowning the fields, and installing a new curb with synthetic field turf.  This project would also include events and goals.  There may also be other associated work that is minor in nature such as fencing, etc. as part of the overall project.

The estimated cost for the project is $4.78 million.

Longtime Boone County resident Jeff Kremer applauded the funding choices approved by the board.

Kremer was a standout at Highlands High School and the University of Kentucky and played briefly in the National Football League.  He previously coached high school football at Conner and currently coaches PeeWee football in the Northern Kentucky Football League.

“The turf and your approval of it this evening, kind of gives me chills,” Kremer said. “It’s an awesome feeling. It’s more than just the PeeWee folks running around – it’s for the students of those high schools, it’s for the parents, it’s for the community. It’s for them to utilize it, but there’s pride that goes along with it as well.”

Contact Mark Hansel at mark.hansel@nkytrib.com

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  1. Derek says:

    Its very telling that we cannot identify the business that has been cheating the public. I applaud the news of this, but seeing that $5 million is to go sports field management and we cannot reveal the cheating business, dampens this great news.

    Pay attention to who we, as a society, protect and who we punish. It is a values statement. As always follow the money.

    • Sean says:

      Don’t be disheartened by the substantial outlay for sports field maintenance. That turf is necessary for marching band practice and performance.

  2. Mary says:

    What about replacing Conner Middle School It’s long over due for another middle and high school !

  3. Rochelle says:

    They should consider a raise for the teachers. The impact they can have on a child’s future is priceless.

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