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Archive for Sunday, July 18, 2010

School board hopes to reduce suggested mill levy

The board knows it must raise taxes, but is looking for ways to make the increase smaller than originally suggested.

July 18, 2010

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Lawrence school board member Marlene Merrill had one thing come to her mind weeks ago when she first saw a scenario for higher property taxes in the district.

“I think all of us were a little shocked at when we started looking at a 5-mill increase,” Merrill said.

As the school board prepares to meet Monday as another step in its budget process for 2010-2011, Merrill and other board members say taxpayers will likely face a property tax increase.

But they hope the jump will be less than 5 mills, and likely closer to a 3-mill increase. Administrators say the increase stems mainly from an expected slight decline in property valuation.

That means it will take more mills to raise the same amount of dollars as the previous year.

The main decision board members will make Monday involves setting the property tax levy for capital outlay and building projects, which is money that by law can’t be spent on general operations like teacher salaries.

In the scenario for a 5.3-mill increase, administrators built in an extra 2 mills for the capital projects, but board members have the most flexibility here. They could fund it at last year’s level, meaning the district’s overall mill levy would increase by 3.3 mills instead of 5.3 mills.

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.

A 3.3-mill increase would cost the owner of a $200,000 home an extra $76 a year instead, making total taxes $1,362, according to the same projections.

Wiggle room

Merrill hopes board members can come closer to a 3.3-mill increase, but she wants to make sure the district can handle it with capital projects.

“We don’t want to be in a position of not being able to fix something if there’s an emergency,” she said.

Chief operations officer Frank Harwood said if board members take away the 2-mill increase from the capital outlay fund, the district will be able to fund projects already under way. The district also should have ample reserves in case of emergencies, like a boiler going out at one of the high schools.

“Unless something just so unforeseen happens, we’ll have cash flow on hand to take care of something bad that happens,” Harwood said.

But the board then wouldn’t have money to tackle any new projects, he said.

Most of the district’s capital needs are in elementary schools. A community task force is studying the district’s elementary schools through next winter.

If that group comes out with any recommendations for elementary buildings for 2011-2012, Harwood said not increasing the capital outlay mill levy for 2010-2011 means the district likely couldn’t start any construction next summer.

But several board members have mentioned taking a different course — in years down the road, asking the public to approve a bond issue to fund elementary improvements instead. Their hope is the district by then will have paid off the 2005 secondary school bonds issued.

“I think that’s a cautious, strategically tolerable financing situation,” board member Mary Loveland said.

The rest of the picture

Other than the capital outlay levy, lower property valuations are driving the remaining 3.3-mill increase.

The district has a higher payment next year on principal for the 2005 bond issue, but those payments were scheduled anticipating future property values to increase, not decrease.

Administrators also project an enrollment increase at Lawrence Virtual School and among students who receive free- and reduced-price lunches. This drives up what the district will get in its general fund from the state, but voters have also authorized the district to levy 31 percent of that general fund in local property taxes, known as the local option budget, or LOB.

Now it will take more money to get to that 31 percent.

Critics say a property tax increase is ill-timed because the economy has not turned around, and they say taxpayers will get hit even harder — Douglas County Commission is considering a property tax increase of up to 15.9 percent.

But some board members say the district already cut $4.6 million for next year because of a drop in state funding.

“That’s all the agony we went through last winter,” Loveland said.

The board will set its maximum budget authority for the mill levies at the meeting at 7 p.m. Monday at district headquarters, 110 McDonald Drive. A hearing on the district’s mill levy is scheduled for Aug. 9.

Comments

LadyJ 4 years ago

Between the school district and county, seniors will be forced to choose between medicines they need and paying property taxes so they don't end up on the street.

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Katara 4 years ago

They are also eligible for the food sales tax refund. http://www.ksrevenue.org/perstaxtypesfs.htm

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workinghard 4 years ago

I guess they could open some of the school gyms as homeless shelters for seniors over 65 at night and weekends. Hey they could make them clean, mow and do repairs in exchange.

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jackson5 4 years ago

Even a 3.3 increase is still too much. The board is suggesting they might keep capital outlay the same as last year. But last year, they spent $1.7M on land, went 300K overbudget on laptops for LVS, used capital outlay for athletic facilities, and so on. These expenses are not going to be repeated this year so our capital outlay budget should be LESS this year, not the same.

If the school board wants taxpayers to support a 3.3 or 5.3 increase or something in between, they should show the taxpayers the budgeted expenditures for capital outlay next year. The county discloses this information. The city discloses this information. Why does the school board get a pass on similar disclosures? The taxpayers deserve to know how their tax dollars are going to being spent.

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jackson5 4 years ago

In the most shocking news, it appears that the school board is going to vote on Code 99 (which sets the maximum budget) on Monday night without having any advance information to review. See http://www.usd497.org/AboutUs/SchoolBoard/Agenda/documents/Budget.pdf for the memo which says the budget information won't be available until right before the board meeting.

Stay tuned Monday night to see which board members are willing to take a preliminary vote on millions of dollars in spending based only on a powerpoint presentation. My guess? The board members will not ask for time to review the budget in detail and will vote 7-0 to move forward with the budget process.

When did good governance at USD497 become optional? School board members would not be micromanaging to ask the district office for at least 24 hours notice to review a multimillion dollar budget; rather, they would be fulfilling their fiduciary duties as elected officials.

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NoSpin 4 years ago

My taxes have already increased 41% on my home in the past 8 years. BTW, my home is modest but was new when I moved in. What was done with the increased taxes over these years? The county and school district may increase it another $600. Give me a break. Cut the fat and live within your means!

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conservative 4 years ago

If they are only increasing it because the property valuations are down does that mean they will decrease it when the property valuations go up in the future? Oh wait of course not. Everybody knew property valuations were down when they went through their budget cuts. They should have cut more then so that they didn't need to do this now.

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LadyJ 4 years ago

When the property values took a huge inflated jump a few years ago, they should anticipated this and have set that extra money aside. But why should they when they can just raise the taxes? Poor management of taxpayers money.

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Carol Bowen 4 years ago

"But several board members have mentioned taking a different course — in years down the road, asking the public to approve a bond issue to fund elementary improvements instead. Their hope is the district by then will have paid off the 2005 secondary school bonds issued."

USD497 used remaining money from the last bond issue for the two sport complexes. South Junior High and Broken Arrow are poorly done, but the schools were able to avoid a bond issue for the sports complexes. I would not trust them with another bond issue or increased millage.

I want our schools to be in good condition, but USD497's priorities do not represent mine.

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Richard Heckler 4 years ago

How much of a mill levy increase does the sports project equal?

Double or triple jeopardy which is it?

This group needs an tax dollar over sight board NOT appointed by the foxes in the chicken coop!

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