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School district surprise causes largest property tax increase in recent memory to get a bit larger

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People who hate property taxes have more to hate in Lawrence following Monday’s special school board meeting.

Most people who had been following the Lawrence school district and its financial affairs expected the board to be presented with a budget that raised the mill levy by 2.4 mills. That was the number that was touted by district officials throughout the campaign for an $87 million bond issue.

But when district officials finally revealed their recommended budget on Monday it showed a property tax increase of 3.503 mills. What happened? Did the district pull off a bait-and-switch? I wouldn’t go that far.

Instead, you could say that the district practiced good salesmanship. During the course of the campaign district officials highlighted what they thought would be helpful in pushing the bond issue to victory. The main financial point they pushed was: They were confident they would only have to raise property taxes by 2.4 mills to pay off the $87 million worth of bonds. They even pointed to their past record. In 2013 they had a $92.5 million bond issue, and they said it wouldn’t involve a tax increase. Sure enough, there wasn’t a tax increase with that bond issue.

Lawrence Public Schools district offices, 110 McDonald Drive.

Lawrence Public Schools district offices, 110 McDonald Drive. by Nick Krug

What district officials didn’t really highlight this time is that while a 2.4 mill property tax increase may cover the bonds, there may be a need to raise property taxes in other parts of the district’s budget to cover other expenses unrelated to the bond issue.

Indeed, that’s what is set to happen. The school board accepted a recommended budget that raises the district’s local option budget by 2.8 mills. That was unexpected by many district residents. School district officials, though, say it has to be done if the district wants to take full advantage of the new school finance formula state legislators approved this year.

That is probably a fair enough statement. It also is fair to note that the school finance formula wasn’t done in May when voters were approving the bond issue, so the district didn’t know how much its local option budget might increase at that time.

But I think it also is fair to say that district leaders didn’t do much to warn voters that the 2.4 mill increase may only be part of the property tax increase puzzle. I think some district residents now feel like they’ve just bought a new car, thought they negotiated one price, and now have learned about all the fees that get added on. But as buyers, I guess we should always assume the undercarriage coating fee is going to bite us in the rear.

The 3.5 mill increase could have been higher. District officials are recommending a step to stave off an even larger mill levy increase. Instead of issuing bonds for the entire $87 million worth of projects this next budget year, the district is going to issue bonds for only about $43.5 million. It will issue bonds for the other $43.5 million in the following budget year. So, instead of raising the mill levy 2.4 mills to pay for the bonds, the district will raise the mill levy 1.2 mills this year to pay for the bonds, then tack on another 1.2 mill increase the following year to pay for the rest of them.

Without that step, the district’s mill levy would have soared by 4.7 mills. The adjustment, though, is not without long-term risks. District officials likely will be keeping their fingers crossed that interest rates don’t go up in the next year. Even a 1 percent increase in interest rates would add millions of dollars in interest expense that the district would have to pay over the life of the bonds. Interest rates are pretty low now, but it is anybody’s guess whether they will be a year from now.

That’s a problem for another day, though. In the meantime, local residents need to figure how much more they are going to be paying in taxes. As we have reported, when you combine tax rates for the city of Lawrence, Douglas County and the Lawrence school district, residents are facing their largest property tax increase in recent memory.

With the school board surprise from Monday, that increase is now larger. Lawrence residents now are looking at an increase of 6.66 mills. On a $200,000 home that is an increase of $153 a year in taxes. And that is assuming your home didn’t go up in value since last year. Property values did go up for most homeowners, so the actual tax increase will be a bit more for most.

Such a tax increase is what happens when all three governments decide to do their projects at once. The school decided this was the year for school facility improvements. The city decided this was the year for a new police headquarters. The county decided this was the year for more than $1 million worth of new mental health services.

Some taxpayers may decide it is the year for an aspirin.

The county finalizes its budget at a hearing tonight at the Douglas County Courthouse. The school district finalizes its budget at a meeting on Aug. 22.

Comments

Melinda Henderson 2 months, 1 week ago

I hope voters have enough sense to vote NO on the 0.55% sales tax "renewal/re-purposing" in November.

Marilyn Hull 2 months, 1 week ago

While I understand that the cumulative effect here may be a hardship for some, I'm not a fan of protest votes. The 0.3% for infrastructure will pay for important transportation improvements. And if you believe in access to motorized transportation, you have to consider voting yes for the 0.25% for transit.

Melinda Henderson 2 months, 1 week ago

It's not a protest vote. It's an "I live on a small fixed income and have run out of money" vote. The CC 3-2 vote to spend over $1M+ on a less safe design for Kasold taught me to not trust Herbert or Soden on infrastructure decisions. (Amyx will not be on CC next year.) And they're going to have to come up with some serious modifications to the public transportation system for me to even consider voting on that tax. And I finally got a bus stop close to my house, which I lobbied for, so I do support GOOD public transportation. And the .05% for affordable housing...while we still pay sales tax on food? That's just ridiculous. And as long as we continue to pay sales tax on food I cannot support any sales tax increases/renewals/repurposings at all. As a community, we are over-extended and need to cool our jets for a bit. Oh, and let's not forget the HUGE increase in our utility bill.

Steve Jacob 2 months, 1 week ago

Has anyone every thought the mill levy for the city, school, and county are going up BECAUSE of the tax lid. It's like they had permission now to raise taxes.

Melinda Henderson 2 months, 1 week ago

That doesn't make sense. (Or I could just need more coffee.)

Jeff Goodrick 2 months, 1 week ago

I'm just glad we sold everything in Lawrence, now if we can get the county under control, I built a Hay barn here in the county, if we were 2 miles north it would of cost me $10, 2 miles to the west it would of been $100, but no in Douglas it was $3000 extra to build it.

Richard Heckler 2 months, 1 week ago

"The .55 percent tax breaks down as follows: .3 percent for infrastructure, .2 percent for transit and .05 percent for the city’s affordable housing trust fund. Currently, the .05 percent funds expansion of the city’s transit service, but that portion would be repurposed as part of the renewal.

Specifically, the infrastructure portion of the tax would fund improvements and maintenance of streets, sidewalks and storm water facilities; construction and maintenance of recreational trails and paths; and purchase and replacement of city fire equipment and infrastructure."

If the sales tax were to be restructured lets's say to .3% dedicated strictly to the walkable community and leave the other as is I would vote for the sales tax.

When it was introduced as it is written now I did not vote for it. Why? The .3% was dedicated to nothing except to helter skelter spending on infrastructure. To me that is not good enough.

RJ Johnson 2 months, 1 week ago

Looks like we will be passing on the tax rate increase to our renters. So much for affordable housing in LAWRENCE!!

I will be voting NO on the 0.55% sales tax "renewal/re-purposing".

Remember these morons everyone come election time!!

Michael Shaw 2 months, 1 week ago

How much rent increase? Four dollars a month?

Deborah Snyder 2 months, 1 week ago

I am ... shocked at the conceited, condescending duplicity of a school board which was elected to represent parents' AND taxpayers' voice AGAINST the self-service of USD497 school district administration.

I am acutely disappointed in our local newspaper journalists for NOT being vigilant against a demonstrated contempt for the paper by school board members who either refused to answer reasonable queries, or outright stonewalled its journalists, and through them, the public at large.

I believe that a community is only as informed as its journal press, and its ELECTED OFFICIALS, who, as members of that community, are expected to act FULLY to inform and educate their community as their representative.

This act of deception-by-omission declares the exact opposite. The dismissal and condescension by this school district's officials and this school board cements the distrust by taxpayers for the future ... traded upon by the selfish, grasping immediacy that drove this bond issue which benefitted the administration, not its students, and most certainly not an uninformed public.

Francis Hunt 2 months, 1 week ago

Lawrence school district is a sink hole. They think they can do anything because "it's for the kids" but their track record shows they don't know how to prioritize. They spend, spend, spend and worry about it later. Even their current plan is "hope for the best." I don't trust them with my money, fortunately I don't have to trust them with my kids.

Richard, yes of course a walkable community is much more important than infrastructure. How many miles a day do you walk?

RJ Johnson you are only hurting yourself by voting no the renewing/repurposing the sales tax.

The school board asks voters to support them and then they do this? A message needs to be sent to the school board. They need to rethink their spending before they finalize their budget.

Gary Pomeroy 2 months, 1 week ago

Math is evidently hard . . . . . It seems to be a continuing pattern of this is the amount - no wait, it is higher.

Tricky Gnosis 2 months, 1 week ago

This is a great example of living in Brownbackistan. The misery of his "tax cuts" (ie., wealth transfers) lingers on.

The state legislature played along and made things worse. Then they finally had to scramble to do something to fix school funding.

Now the local school districts have to scramble to get their districts eligible for state funding.

Meanwhile the beneficiaries of austerity get to complain about how "this just shows how you can't trust public schools" and the non-beneficiaries (everyone else) pays for the privilege of the wealthiest.

Michael Shaw 2 months, 1 week ago

This article looks to me like someone making a mountain out of a mole hill. The bottom line here is that the annual increase, estimated, will be 150 instead of 100. Yet the article has the word "hate" in it twice! And lo, the haters have emerged in the comments section.

Deborah Snyder 2 months, 1 week ago

To Gnosis & Shaw; awh, niiice try, guys, and now, Back at the Ranch: It is not the responsibility of the community to parse and interpret what a public institution with elected officials is proposing they pay for.

Heads Up here, you two; it's not okay to sucker punch the press, the fourth estate, with misleading information regarding the community's school system costs, got it?

Annnnd I've gotta wonder how both the city and the county commissioners feel, given that they too based their tax levies in part, on what they knew to be true with the school district levy, as it presented it to the public this past year.

Who knew being fully transparent and honest with the public was so hard as an elected official??!!

Richard Heckler 2 months, 1 week ago

Complete Streets/Walkability concept could use dedicated funding in order to finish a plan. Rather than stretch it out for years and years and years,

Complete Streets Policy establishes guiding principles and practices to create an equitable, balanced, and effective transportation system that encourages walking, bicycling, and transit use, to improve health and reduce environmental impacts, while simultaneously promoting safety for all Users of Streets.

See pages 4-8

https://assets.lawrenceks.org/assets/mpo/pedplan/DRAFTPart1.pdf

Complete Streets - Complete Streets are designed to serve everyone: pedestrians, bicyclists, transit riders, and motorists, regardless of age or ability.

https://assets.lawrenceks.org/assets/pds/planning/documents/CSPolicy.pdf

https://news.ku.edu/research-shows-easy-walk-communities-can-blunt-cognitive-decline

So why not fund complete streets /walkable community with .3% sales tax and keep the public transportation money coming in? and affordable housing assistance.. Perhaps city hall could consider a slight reduction by cutting the .3% in half for complete streets/walkability dedicated funding.

David Holroyd 2 months, 1 week ago

Stuart Boley should read this and ponder the story the next time he promotes "affordable housing'.

I have said all along the biggest culprit is USD 497. And no, I dont hate education...I come from a family of teachers, my mother, aunts great aunts cousins, siblings, But Lawrence is just plain greedy and wasteful.

What happened to building buildings on the same footprint.? What happened to custodians maintaining them and taking pride in the school? What happened to the teachers who are paid more than those in the 40s and 50s and 60s and they didnt get the pensions that teachers now get.

This whole system is backwards and will fail.

Melinda...I too have a "fixed" income but I was smart enough to get a place a condo..in a complex with pools, shopping nearby an HOA fee of $177 and the taxes are 386 a year and the condos sell for more than the county valuation unlike Lawrence which jacks up the valuation and the house sells for less than the listed price.

Lawrence best get their act together fast the cleanup of the city and school district and county will take many years.

Spend, spend , spend all want to spend and take glory in new facilities that they cannot even maintain.

btw...How's the roof coming along on the Mausleum at Oak Hill,,,,our Mr. Markus should hire a roofer, after all he has been authorized to spend $50,.000 with commission approval.

Matt Beat 2 months, 1 week ago

Yay! I love paying lots of taxes. This is such good news. Now I get to work overtime to pay the bills. What fun!

Steve Jacob 2 months, 1 week ago

If you read all my post for the year, I have said many times the school board can not be trusted with our money. Creating new positions for quitting superintendents, balloon payments, ect.

Steve Jacob 2 months, 1 week ago

Any FYI, I can about guarantee bonds will be half a percent to one percent higher at this time next year.

Paulina Cameron 2 months ago

Tax is an aspect of our life that control everything. In order to buy anything and invest in anything, you have first to calculate the tax it will hold. Even the Best Of Writers consider tax to be a killer of the education pursue. The increasing of tax is pretty bad news, but it’s good that we have found out about it early in order to come with a decision for the future. I understand all the sarcastic comments above and really sympathize these people and myself.

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