Saturday, June 18, 2011

What The District Would Rather You Not Know

The June 16, Budget Hearing was all about sleight of hand and basic mis-direction.  Don't answer the questions you don't want the public to know---instead keep repeating a mantra.  You know...kind of like politicians that don't answer questions during a debate, they just keep reciting what they want to tell you.

What's the projected tax levy?
What they want you to focus on is the % increase over last year...and that is 3.48%.
Yeah?...but what is the actual levy amount?
OK, since they won't, let's do the math for you.
It starts with last year's tax levy, which was $45,503,637.  Therefore, if the district's draft budget represents a 3.5% increase, then the plan is to levy $47,087,164  this year.

The increase in levy is this $1.6M, with $650K of that going to debt and $950K additional for the General Fund.

What the district isn't saying:
Either through savings or cuts made by the school board, the "budget" has been reduced by $725,000.  BUT...the district did not take this money out of the budget.  They took out or reduced line items, but they left  the required revenue in the budget.  It's a sweet little deal so that they can convince you and the board to fund the district's other initiatives.  You know what's actually more interesting?  They left $725,000 "unallocated" in the budget, yet if one sums up the total cost of all their desired initiatives, the total is only $600,000!!!  So...why didn't they reduce the budget by $125,000?  Hmmm?  $725K represents 17% more than they need to fund all the initiatives they want.  It's just more of the same...put more cash in the Munny Pot.  

Actually, if you remove the $725,000 from the budget, the tax levy increase is reduced from 3.48% (let's call it 3.5%, shall we?)  to a mere 1.9%  Now that's more reasonable, right?

What is the projected 2011-12 mill rate?
The district doesn't want to tell you!  Their mantra is, "Focus on the tax levy"...remember?

Mill rate is tax levy divided by Equalized Value x 1000.  The equalized value is projected to remain flat (more on that to come!).  Therefore, if the tax levy is increasing by 3.5%, then so is the mill rate.  Since the final mill rate for the district last year was $12.12, then a 3.5% increase would make it $12.54.

The TRUE mill rate (without the budget fluff).
First, once we remove that $725,000 from the budget, the tax levy is increasing by 1.9% and then so, therefore is the mill rate.  That would reduce the mill rate to $12.35.

What will be the tax on an average ($200K) home?
The district presentation indicates that a home valued at $200K will pay an additional $84.39.
OK...but what's the total tax?  Obviously the district would rather not highlight the total school tax.  But we'll do it for you.  At $12.54 mill rate, the total school tax on a $200K home will be $2,508.

What's the real tax?
Once we take out the $725K,  the tax paid on a $200K home is actually $2,470, an increase of only $46.11 over last year.

How valid is the district's projection of a 0% increase in the district-wide equalized value?
When asked, the district reluctantly indicated that current projections (which we will know by August 15th) is for equalized value to once again DROP this year by at least 2% and more likely 3%.

How does a 3% drop in Equalized Value the mill rate/property tax?
The district flat out does not want to discuss this, so we will.
Again, assuming that the $725,000 "unallocated" is removed, if the equalized value drops 3% district-wide, the mill rate jumps to $12.73, a 5.0% increase over last year.  Note that, with a 3% reduction in equalized value, the tax levy may only be increasing by 1.9%, but the mill rate will increase by 5.0%.

What initiatives is the district considering on which to spend an additional $725,000
We provide the following graphic summaries, one in terms of mill rate effect and the other based on tax effect.  Note that we believe that many of these initiatives are worth taking on.  We simply object to the underhanded manner in which the district went about it.  Culver gets all upset about sham residences and ulterior motives and then the district pulls this rabbit out of a hat.  The right thing is to prepare the budget without them and then show how each (and the total) would impact the budget.