The Community Consolidated School District 15 school board approved a roughly $110.5 million property tax request Wednesday, a 3 percent increase from last year.
On a 4-3 vote, the board authorized the maximum amount allowed under state law. While they approved 3 percent, state law caps levy increases at either 5 percent or the Consumer Price Index, whichever is lower. With the CPI sitting at 1.5 percent, the district is following the common practice of “ballooning.”
This is done because new development might allow for increased property tax revenue, so districts often ask for more than they know they will receive in order to capture every penny of additional revenue. In the end, while they are asking for 3 percent, they will only get the 1.5 percent plus any new development or growth.
But that was the root of the argument from board members. One side said they should just ask for 1.5 percent and not try to go after the new growth. The general argument is that people are already over-taxed and, as board member Manjula Sriram put it, the district needs to “cut up the credit cards” and not try to solve budget woes with extra taxes.
“At this time to be fair to taxpayers, we should cap it at 1.5 percent,” said Board President Tim Millar, who said they need to start holding the line now because of what he felt was overspending by previous boards. Sriram and Gerard Iannuzzelli joined him in opposition.
The other four members favored 3 percent. Board member Scott Herr said they are still working on a long-term financial plan and not trying to secure every tax dollar allowed would only hurt them in the long run by putting them further in debt.
The district is trying to figure out its long-term finances after the failed 2010 bond referendum, which asked voters for $10 million in working cash and $15 million in facility upgrades.
For the past few months, the district has been hosting community meetings to conjure up ideas to deal with the structural deficit, a common problem for schools when personnel and other costs outpace the state-limited property tax increases.
The district is operating with a $6.5 million deficit this fiscal year, and that is projected to jump to $10 million next year without significant changes to expenditures. The district started the fiscal year with $45.2 in total reserve funds, according to financial documents, but that number is expected to drop because of the deficit.
A financial plan is expected to come to the board in early 2012. Superintendent Scott Thompson said all possibilities are on the table right now, from simple belt-tightening to more drastic measures like layoffs.
