Workshop: Tax Increase, $15 Million Referendum

The proposed school board budget, now on display, includes expectation of the maximum tax increase they can legally get–an anticipated 1.5% increase (adjusted to the Consumer Price Index). So your taxes will go up again next year. There was no discussion of freezing or making cuts to the budget in any way. To their credit, the school board scheduled their public hearing on their budget for Tuesday, Sep. 16, 5pm.–NOT on the night of the vote as was their custom, but a week early to allow them time to consider public opinion. Mark your calendar.

The referendum that they voted to put on the Nov. ballot is for $15 in alternate revenue bonds. The bonds are kind of like an advance–with interest, $9 million of interest–that will be paid back from the operating funds. This, they say, will not raise taxes. HOWEVER, bonds must be paid, and if there is no money in the operating funds, your taxes WILL go up, guaranteed, as the wording on the referendum admits. Sue Sarkauskas from the Daily Herald did a fine job reporting: http://www.dailyherald.com/article/20140… . Even if they maintain enough money in the operating fund to not raise taxes to pay the bonds, they will have to raise your taxes to pay for other repairs and additions not covered by the $15 million.

The biggest problem with the $15 million bonds is simple math. For the next 4 years, through 2018, there are $22.6 million in capital projects if you include the $13 million athletic fields plan. Through 2024, that number grows to over $32 million. The way it was sold to the board is they can have $15 million up front to knock off a bunch of projects and pay it back with $1.2 million/yr for 20 years out of their $1.5 million/yr budget, leaving $300,000/yr (for 20 yrs) to use for whatever comes up. Yet, over the bonds’ 20 yr payback, that $300,000/yr adds up to only $6 million (300,000 x 20=6,000,000). $15 million + $6 million = $21 million, $1.6 million short of the money needed just through 2018 for capital projects. But the bonds run through 2034! So for 16 YEARS, there will be no money for ANYTHING. When roofs leak and boilers fail, they won’t have the money to fix it, so what will they do? Raise taxes–but they will say it’s for the roofs, the boilers, the parking lots, the children. That $15 million they would have already spent included the unnecessary stuff: artificial turf, new stadium lighting, stands, maintenance shed, etc.

ref math2

The Sports Boosters were offering to contribute $100,000/yr over 10 years. That wouldn’t even cover the $1.5 million initial estimate for artificial turf on the football field.

The school board did not have to put it to referendum, but if they passed the bonds quietly (like the Park Board did for the rec center), citizens could (and would!) force a binding referendum with petitions. The school board chose the more honorable way. Unfortunately, this thing was rushed through so quickly, as board members noted, that perhaps they didn’t have time for the numbers to really sink in.

The video of the meeting is posted on our Videos page.

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