There are reasons to vote against the upcoming May 6 Referendum to increase property taxes in Decatur by nearly 0.3 dollars per $100 assessed value.
1) Former Superintendent Don Stinson and the School Board knew full well that the massive debt they were loading onto our community would get caught up in tax caps and thereby require using operating funds to cover the shortfall. They were fine with that - so let them live with it.
2) The whole idea behind the tax caps was to make governmental units more responsible with their budgets and the amount of debt they accumulate. If they have to make cuts, so be it.
3) The second intergenerational obligation we have is to our elder community members. Even if you and I can afford another $50 to several hundred dollars a year, those living on a fixed income may already be in a bind. They would have bought their homes long ago, when the costs were much lower. With each passing year, the value of their homes have risen and along with that the property taxes due grew. I know I would feel a lot better about this referendum if we could somehow carve out the senior citizen population - myself excluded - and forego any rise in their property tax rate.
4) The Decatur School District still owns well over one hundred acres of excess property. More than one person has suggested to me that they sell it, even if they must take a loss. If things are really desperate, then sell the land.
5) The district cut $12 million from their budget over the past few years, and I trust that number. Yet, the list of cuts presented by Dr. Prusiecki suggests more might be done. When I saw his presentation (see sidebar of this blog for a link to the PowerPoint), he offer a two-page list of cuts. Many were from the 'Fiscal Restructuring' of a few years ago. Only, not everything that was supposedly cut back then was actually cut. Take the first item on the list - 7 administration positions supposedly cut. They included 4 administrators from the Central Office, one elementary principal, and two high school 'directors'. There may have been two real cuts in the Central Office, but it is hard to tell if they have been replaced - as of now there are at least 14 administrators in the Central Office (folks under specific contract). Certainly the Elementary Principal position was filled immediately and by this point in time the two High School Directors positions are once again filled.
A jog through the District website shows one Principal, 5 Directors, 1 Athletic Director, and 1 job-unspecified Administrators at the High School. Beyond that, there are 8 Principals and 12 other Administrators through the rest of the District's school buildings.
6) I am extremely concerned about the impact of a higher tax rate on our community's ability to attract move up homes and much needed commercial retail. The tax rate just over our borders is much lower, as I noted in earlier posts.
7) Even if we could weather 7 years of higher taxes, what happens after that? Will the district just absorb the tax increase and become dependent upon it, even as the State Legislature offers other means of lowering the cost of our debt or eases the effects of property tax caps or TIFs?
8) There are a couple of legislative items currently still in action at this year's Legislative Session that could help. One is to give the District the ability to refinance its bonds for 10 extra years, once they are eligible in 2016 due to the bonds' own terms. That would lower the principle and interest due, thereby lowering the tax rate which in turn lowers the number of properties hitting the tax caps. The other would cause the Ameriplex TIF (part of the Consolidated Airport TIF) to sunset by 2025 at the latest. The bonds owed by that TIF will be fully paid off by 2021 - so conceivably it could sunset in the last year of a 7 year referendum.
If there were to be only one 7-year referendum, it would be less destructive to our community's future than if it were to be rolled over again and again and again.
Those are the reasons to vote no that leap to mind.
[edited to note: I thought the PowerPoint presentation by the Superintendent was posted on the website. However, I cannot find it. I'll post a link if I can]
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The Pollyanna Approach
14 hours ago
7 comments:
I am a long time follower of your blog and was surprised by how unbalanced your recent posts have been. I moved to Decatur Township during a building boom in the mid 2000's. At that time, the schools had to be experiencing large student enrollment increases and justifiably anticipated assessed value growth (from homes and businesses that support the residents). No one could have predicted the deep recession that followed. Retirement accounts and home values plummeted and new construction, along with increased assessed values which would have mitigated property tax cap losses for governmental entities, became non-existent.
The enormous debt the district took on is responsible, not the recession.
The building boomlet (very small in size, really) was not enough to justify the building craze. We overbuilt and overspent.
The AVs were never going to keep up with 3% and higher tax rates. At this point we are over 4% tax rate - and our AVs were not going to increase 30% to make us dip even to a 3% rate- where caps hit all properties except some homesteads. You might want to go back and review the timeline.
I completely understand the recession was not the only contributing factor that got Decatur to where we are today. However, it is apparent that other factors, including the school debt service rate, play a vital role in taxation. One example that comes to mind is the layering of governmental services in Marion County. These range from the County, City, Health & Hospital, Library, Public Transit, Schools, and Township Government. Counties which surround Marion have schools (Clark Pleasant, Plainfield, etc) with similar tax rates without as much of an impact from property tax caps. The difference is the level of taxation of other governmental entities. Let's assume Decatur Schools debt rate was .70 instead of more than 1.4. With a combined tax rate greater than 4.0, the lower total rate would still be higher than 3.3 per $100's. Still much higher of a rate than our community can afford. I believe the more relevant question is how has the school, and other government units, managed their tax rates over the last few years.
We are in this situation because of our overwhelming debt. Thank goodness the tax rate due to our school district is getting some disciplined attention, thanks to CFO Kirk Farmer. The school tax rate for Decatur has dropped from 58% to 49% of the total property tax rate in recent years. But, it is still driving roughly half of the 2014 property tax rate (49.4% to be exact). So, to point out the sins of 7 other taxing units when the schools cause half the rate by themselves AND they are the ones asking for even more tax money, is kind of irrelevant.
The big driver is the debt load. Yes, other things contribute, but its like ignoring the temperature as a factor in determining when it snows rather than rains and concentrating on the effect of smog particles instead.
Is it uncommon for school districts to make up such a large part of an areas tax rate? Also, with property tax caps in place, what happens to an entities revenue when some raise their tax rate while others stay the same or decrease? It seems like to me those trying to be fiscally responsible would be losing $$$. Too many moving parts...
Welcome to the weeds. Yes, lots of moving parts, but some wheels and cogs are larger.
Yes, there is a war between taxing districts, each trying to push as much of the tax cap (circuit breaker) penalties to the 'others' as possible.
As a broader Indiana community we certainly need to have a bigger conversation about all those moving parts and stop pretending that there aren't actions by governmental units that exasperate their own finances and tap taxpayers for even more money.
The local community is being asked to raise their own taxes to save cuts at the schools.
Those increased taxes can stifle our future growth - growth that might have bailed the schools out in time. It might also lead to a lack of fiscal discipline - as in, there's always more money where that came from. It might avoid cuts that should be made and other belt tightening measures that really make sense. Pretending it is the unfeeling hand of economics and policy wonks and not decisions they made - knowing the advice was to not do so - won't help the school board from making the same mistakes again. Avoiding the discussion of how we got here does not put us in a better position to not return to this mess, if we can agree on how to get out of it.
The schools want more money. The City will be asking for increased income taxes next year and doing all they can to shove tax cap penalties to the townships. Mass transit advocates will ask for who knows how much more taxes to pay for an expanded system that will not benefit our community in any way. The Township has seen its fire levy more than double in the last couple of years and, frankly, who know how they are managing to pay the bills.
But at the focal point of all those hands reaching into our purses are the folks holding the purses. How much is too much? Should a senior citizen lose their house because of this? Is that right?
Why is money provided by the taxpayers for basic services squandered on other things first? And why do we have to hear from the media pendants that we 'have to be willing to pay for basic services', when we already did so?
Stick around. I'll be getting back to TIFs and how they account for more than half the tax cap (circuit breaker) penalties. I'll be getting back to the idea that for every dollar of increased tax levy affecting Decatur, another half dollar will be taken from the schools.
But, still, the school board blithely overbuilt, buried us in debt they knew we could not afford, did so fully knowing that tax caps would necessitate using operating money to cover debt payments, gave gargantuan raises, bought real estate they didn't need, gave golden parachutes that only increased our unfunded liabilities, lived off loans they could not pay back. This is why we are here. How do we get out of this mess without harming our community's future and how do we make damned sure no future school board sets us back in this fiscal nightmare again?
The school district is run by buffoons that been entrenched for years. I grew up and went through the school system. You cannot gauge the quality of education offered by the sentiment of the students who know no better. I thought the schools were fine when I went there, but in retrospect, they were in a pretty sad state. By contrast, they are horrible today. I have been putting my three children through these schools and just finally moved out of the district after being a resident since I wad nine years old. They make excuses for cutting back their foreign language programs (that its expensive... They don't tend to hire teachers to teach foreign languages full-time... They also usually teach English... We aren't talking about full-time requirements). They don't need more money, they need to figure out how to use the money that they have, like so many families in the district.
And, buildings don't educate students... They are a burden. The rebuilding of the high school was a waste because they didn't account for near term growth.
Here is what needs to happen:
1) sell the excess land, yesterday... It not only is unnecessary, but it cuts down on tax revenue.
2) oppose the ridiculous zoning issues in the district:
A) keep non-residential zoning north of SR67 with the exception of retail along the south of SR67 (the Decatur Township Civic Council has created this issue by trying to court Target for years... They should have lobbied to get WalMart within the township boundaries instead of letting it slip to Hendricks County where they get the benefit of the property tax dollars built on revenue largely attributed to customers from Decatur Township).
B) oppose the building of any more apartments or low cost housing. This not only lowers the average tax revenue per capita, it creates transient families and causes a budgetary burden on the school district by having so many students enter and exit the district throughout the school year. Higher end housing will allow for greater tax revenue and that will happen only with support for such action by the school district through fiscal responsibility and improved opportunities in addition to opposition to warehouses throughout what has has been the residential and agricultural base of the township.
Also, end the basis of dual credit courses on Ivy Tech. It is a waste because the math and science courses only transfer to four-year schools as elective credit or require students to take additional courses. Partner with a local four year institution.
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