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Archive for Sunday, July 4, 2010

School board to consider raising taxes

Members of the board say it may be a necessary move to keep funding schools.

July 4, 2010

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Lawrence school board members last week learned they have another difficult budget decision to make — just months after they cut expenditures by $4.6 million.

This time, the heated discussion will involve a potential property tax increase, as administrators say the district will suffer from an expected slight decline in property valuation. During a budget preview session last week, administrators discussed the possibility of a 5.3-mill increase if valuation in the district went down 1 percent.

“Our property valuations have shown a slight decline, and that is a political reality that we need to accept,” said Rich Minder, who became the board president on Thursday.

But critics said a property tax increase would be ill-timed because the economy continues to sputter.

“The fiscal responsibility is not there,” said Scott Henderson, a Lawrence resident and retired Hallmark Cards manager.

“They need to have a voice of the people who are paying the taxes.”

Board members still have options before they next discuss the budget July 19. Here are some more details about the district’s mill levy situation.

How much would a 5.3-mill increase cost a property taxpayer?

A mill is $1 in property tax for every $1,000 in assessed valuation. If board members passed a 5.3-mill property tax increase with a 1 percent decline in property valuation in the district, it would increase a $200,000 home’s property taxes by $122 a year — to $1,408.

What is the proposal board members face? What are the main factors driving a potential property tax increase?

In addition to aid from the state, school districts collect local property taxes for expenses.

To make up for a 1 percent decline in property valuation, board members already are considering:

• Increasing the local option budget levy by 2.3 mills.

• A 0.9 of a mill increase in bond and interest levy to pay off the 2005 bond issue.

• A 2-mill increase — if they choose — for other capital and building projects in the district.

In addition to these main increases, there are some other small levies also under consideration.

Local option budget

Lawrence school patrons have given the board the authority to collect from taxpayers 31 percent of what the district receives from the state. This extra tax — called the local option budget, or LOB — allows districts to supplement state aid. Generally these funds cover operating expenses, including salaries.

Administrators calculate the amount of money flowing into the general fund will grow for 2010-2011, mostly because of projected enrollment increases at the Lawrence Virtual School and among students who receive free- and reduced-price lunches. The district receives more money for at-risk students.

So to fund the LOB at 31 percent will require a higher mill levy.

And another mill-levy increase would be needed to offset reductions in property valuations.

The 5.3-mill increase the board will consider also generates $1.1 million to make up for additional losses in state revenue.

“We’re getting double-whammied, obviously, with the drop in valuation and then with the decrease in state aid,” Superintendent Rick Doll said.

Bond and interest

Kathy Johnson, the district’s division director of finance, said lower property values would also hurt the district in this area. The district has a higher required payment next year on the principal for the 2005 bond issue. The payments were scheduled years in advance with the anticipation of valuation increases.

The bond issue funded improvements at secondary schools and construction of the new Broken Arrow School, and the district has used some of the money for the new high school athletic facilities.

Capital outlay

Separate from a bond issue, money for capital or building projects — including most of the athletic facilities improvements — comes from this levy. Board members have the most flexibility here. It’s possible the board will try to find savings in this area of the budget.

“That’s the most pronounced decision they have to make,” Doll said.

Administrators say some of the district’s buildings, particularly elementary schools, have repair needs. But some board members said with a task force studying the elementary schools this year, the district likely won’t look at increasing this levy to fund major projects next year.

Could the board make further cuts?

Board members in March cut $4.6 million in expenditures because the state will be sending it less money. The recession forced the state to cut its base state aid for each student from $4,218 to $4,012.

Board members do have options. For example, they don’t have to fund the LOB at the full 31 percent. If they reduce that by 1 percent, Johnson said, it would mean a reduction in expenses of $720,722.

Critics, like Henderson, said a property tax increase would be irresponsible, especially for people living on fixed incomes.

But the idea of further cuts hasn’t gained much traction at district headquarters. Minder, who believes education is an economic development issue, said board members need to have more discussions about the mill levy.

“I am a champion of the investments that our community can make in human capital,” said Minder, the new board president. “Our current budget crisis is a context in which we have to make that investment. We can’t just simply sacrifice our future economic well-being because of our current crisis. We just can’t do that.”

Comments

Richard Heckler 3 years, 9 months ago

Wellness campus concept plan ( .PDF ) Potential components of the wellness campus

Components of a concept plan for a potential wellness campus on property owned by the city of Lawrence and Lawrence school district at the southeastern edge of town:

Organizers now hope to take the plan from dream to reality, acknowledging that concept has plenty of distance to go: first needing public support, and then securing as much as $25 million in financing.

“We just have to see if the community wants to dream big,” said John McGrew, leader of Outside for a Better Inside, the organization driving to create the wellness campus in southeast Lawrence.

Campus plan

The vision from McGrew and others in the organization is just beginning to make formal rounds among local leaders, after months of development behind the scenes. McGrew plans to share concepts with members of the Lawrence City Commission and Lawrence school board in coming weeks.

As envisioned, the campus would be built on parts of 115 acres owned by the city and Lawrence school district at the southeastern edge of Lawrence

USD 497 taxpayers and city property owners are being forced to contribute tax dollars without the privilege of casting a vote. Keep in mind this campus ADDS to the cost of running the city = one more tax increase.

Where's the money?

The expansive sports projects adds to the cost of maintaining USD 497 = tax increase over and above the tax increase USD 497 is requesting.

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tunahelper 3 years, 9 months ago

I live within my budget and so should the school board. cancel all pay raises for all teachers and administrators.

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weeslicket 3 years, 9 months ago

repeating myself: the fundamental problem lies with the kansas school finance laws. please, state of kansas, repair these laws so that local districts can make better, and more comprehensive, and supportable, decisions with taxpayer money. does anyone really understand school finance shenanigans?

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sierraclub 3 years, 9 months ago

Thanks to George W Bush for making this all possible. I am sure glad that his failure is making my taxes go up!!!! Thanks!!!!

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mr_right_wing 3 years, 9 months ago

Hey Lawrence School Board members...

Eat my turnips!!

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Richard Heckler 3 years, 9 months ago

bump for practical fiscal responsibility

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Lori Nation 3 years, 9 months ago

Eudora is looking better and better everyday. We are now paying more for everything than Johnson County residents.

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Richard Heckler 3 years, 9 months ago

East Heights would be an excellent location for an administration building and the administration.

Move this group into the neighborhoods so we taxpayers can keep an eye these reckless spenders. Cannot blame all of our woes on Topeka,Kansas.

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Richard Heckler 3 years, 9 months ago

Community indicated not interested in expensive athletic project. Why did USD 497 do this in tight economic times? = another tax increase http://www2.ljworld.com/polls/2007/may/should_city_spend_20_million_or_more_play_project/

Let me get this right. http://www2.ljworld.com/news/2009/oct/22/school-priorities/#c1027186

Perhaps it is time to put the lavish admin building on the market to help cover cost of new athletic project. Admin likely could share space in the Virtual School building thereby making USD 497 admin a part of the community. AND put this property back on property tax rolls.

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Richard Heckler 3 years, 9 months ago

USD 497 allegedly could not afford to keep East Heights open. Yet did not sign a triple net lease with the Boys and Girls Club means USD 497 taxpayers are making a tax dollar donation to the Boys and Girls Club.

"The lease is for $1, but it prevents the district from having to pay most expenses on the building. The Boys and Girls Club will be responsible for costs such as utilities, minor maintenance and snow removal." USD 497 taxpayers are picking up some of the expenses BUT the LJW did not list which expenses or exactly how much this concept is costing USD 497 taxpayers

Now remember this: By Chad Lawhorn

December 6, 2009

"The Lawrence school district has paid $1.73 million to purchase a prime piece of property that would be prominent along the proposed route of the South Lawrence Trafficway.

At their Oct. 26 meeting, school board members approved the purchase of 76 acres of farm and pasture ground southeast of Lawrence. The property, near the intersection of East 1750 and North 1300 roads, would be just west of where the South Lawrence Trafficway would connect with the existing Kansas Highway 10 east of Lawrence.

School district leaders said they did not have a firm plan for the property, but said it could be used for a future school site or a new outdoor campus and wellness center that is gaining momentum with Bill Self’s Assists Foundation and also with a private board led by Lawrence businessman John McGrew."

So it appears USD 497 has plans with John McGrew and his 25 million dollar field house in the middle of a future housing project.

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Kontum1972 3 years, 9 months ago

GD.....i just refinanced my home.....now you school board idiots are going to raise my taxes on my property...so now my refinanced home will cost me more......because you all cant balance your checkbooks my kid graduated 2 years ago...have a bake sale

what happened to all this casino money that was suppose be generated to fund schools...that's how it was sold to us...why don't you tax those millionaires who reside here..like all those basketball icons who have second homes here. I was planning to retire this year....now i will possibly have to work longer to survive, THANKS A LOT.....!

To me it seems like every couple of months a new tax is being levied because some idiot cant balance their checkbook....the democratic way is for us to vote on it....so have a special election...and let us vote....if it fails ....have a bake sale. u bozos cant even fix the damn streets....obtw,,,Rich Minder is this your real job?

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penguin 3 years, 9 months ago

This is just a bit insane. If you look at the USD 497 budget that weeslicket posted, the current mill levy for schools is 58.084. The proposed increase is 5.3 mills. This means the mill rate would be at 63.384 just for schools. This is roughly a 8.4% increase.

Also I am wondering where these declining property values occurred. It sure did not happen for me.

I just find it incredibly hard to believe that USD 497 just saw the writing on the wall. Base State Aid was cut during the year last year to $4,012 during the school year. Even if that was not to alert them, the Legislature set it more than a month ago.

However, the most irresponsible part of this increase is a that 2 mills of the increase is for capital and building projects. The patrons of the district have already seen the result of what happens when money is available for building projects. I know this can be used for a diverse array of projects, but come on.

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toe 3 years, 9 months ago

This will easily pass. Lawrence is dominated by tax users, not tax payers. Therefore, it is a done deal. If you live in Lawrence, you sign up for increased taxes. It is just part of the deal.

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persevering_gal 3 years, 9 months ago

As much as I would love to help children receive a better education, I simply cannot afford to. If raising property taxes is the last resort in receiving funds, then the board is obviously not creative in budgeting or they are flat out lazy to not take the time to think of a creative idea. Do a bunch of little things rather than one large plan that could severely hurt people's pocketbooks. For now, try and relax, do what you can do with your funding, and wait for the economy to improve. Many are seeing a decline in some shape or form and worries about future expenses possibly inclining, but it doesn't necessarily mean hit the panic button. This isn't America's first and only recession.

“I am a champion of the investments that our community can make in human capital,” said Minder, the new board president. “Our current budget crisis is a context in which we have to make that investment. We can’t just simply sacrifice our future economic well-being because of our current crisis. We just can’t do that.”

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ILoveLawrence 3 years, 9 months ago

This is getting ridiculous. Lots of people are on fixed incomes and a 5.3% mill increase is devastating.

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tir 3 years, 9 months ago

Maybe property values have dropped on a few McMansions in Lawrence, but they actually went up for some of us who own small houses. Therefore the school board is already going to get more from me in taxes even if they don't raise the mill levy. I support funding that actually goes for education, but not wasteful spending such as the district has done on those extravagant athletic fields. The district needs to back off on tax increases that don't fund education needs.

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weeslicket 3 years, 9 months ago

... said Scott Henderson, a Lawrence resident and retired Hallmark Cards manager. “They need to have a voice of the people who are paying the taxes.”

the school board, duly elected, is the voice of the taxpayers. (republican representation of voters; rather than direct democratic vote) not that this fact will make anyone feel any better about any of this.

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jackson5 3 years, 9 months ago

USD497 - you will go a long way toward getting public support if you post the complete list of expenditures out of the capital outlay fund last year (purchase, amount and purpose) and then list the budgeted expenditures for next year out of this fund. After the $1.7M land purchase, the ongoing athletic field fiasco, the lay-offs and the potential for school closures, it is time to build some trust and be more transparent.

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jafs 3 years, 9 months ago

Also, spending capital improvement money on athletic fields instead of building maintenance/repair wasn't such a good idea.

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KU_cynic 3 years, 9 months ago

"Lawrence school board members last week learned they have another difficult budget decision to make."

Learned last week! You have got to be kidding.

The writing has been on the wall for the past 2-3 years -- flat or declining property values, unsustainable state expenditure/revenue ratios, rising health care costs, etc. The school board, city commission, and county commission should have been looking ahead and making realistic plans all along, instead of bandaged budgeting from year to year while acting shocked that more cuts had to be made.

All this in the context of bold plans to move forward with library expansion, the Farmland property boondoggle, etc.

I hope that in the next round of elections we find some adults to put in charge instead of these naive bozos.

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formerlyanonymous 3 years, 9 months ago

Would LJW consider creating a timeline of the past decade regarding school finance issues? It feels as if the school district is constantly begging for money. Why isn't their budget set up to handle school repair issues as they come up? Surely basic maintenance isn't an unanticipated expense. Do they have a 20 year master plan for capital outlays?

I think now is the time for restraint.....between sales tax increases, utility increases, insurance premium increases, food cost increases, and flat wages....all of us are hurting. After all, the drop in basic funding for students occur because of a recession.

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M. Lindeman 3 years, 9 months ago

This is BS!! 5.3 increase of the mil lev would add about another $840.00 to my property tax's.

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Glo 3 years, 9 months ago

On the June 3 on-line chat with LJWorld, I asked Dr. Doll if there were plans to raise the LOB. His response was that they could not, it was at maximum. I find his remark misleading, at best. Now, one month later, there is a way around this. Creative financing???

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publicschoolsupporter 3 years, 9 months ago

A new South Junior High was built with 2005 bond issue funds. Modifications to the existing Broken Arrow elementary school were tied into that construction project but a new building was not included.

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commuter 3 years, 9 months ago

Don't raise taxes. Remember you had to make people take a pay cut and now you are looking at raising taxes. Sounds funny to me.

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