Bryant Arkansas School District – 3/14/2017 Millage Election - Passed
On Tuesday, March 14, 2017 residents of the Bryant School District voted to increase taxes. This page explains why I was against the millage increase.
If you live, work, or shop in the Bryant School District you should care about this because it will affect your property taxes or rent, and will increase the expenses of your utilities and the businesses where you work or shop. Even if you do not live in the Bryant School District, your school district is likely to ask for a bigger percentage of your money sometime in the future. The student population is growing, expenses are increasing, and the schools need more money. Even if you have already decided that you are for or against the tax increase, perhaps you are willing to consider that there are valid reasons for people to vote differently than you plan to vote.
If you disagree that the schools need more money, then this is not for you. The question for the rest of us is, with increasing revenue from an increasing population, increasing housing units and valuation, and increasing state matching funds tracking with higher student population; is that increasing revenue enough to meet the increasing expenses faced by the schools? If not, is the proposed tax increase the answer? Is it wise to take out a 30 year loan less than 10 years after previously taking out a loan that has not been paid in full? Is it wise to borrow money when the amount needed to pay back the loan will be more than twice the original amount borrowed? What happens 10 years from now when we are asked for another millage increase? Will we be paying triple or quadruple the amount of the new loan? Where does it end?
I do not know anyone who does not believe that education is very important, and that all children should have the opportunity to get a good education. However, before we vote for a millage increase, we should be certain that we will be getting our money's worth, and that we are not risking the future fiscal health of our schools. Before voting it would be good to consider all the issues and carefully balance the pros and cons rather than making a decision based solely on emotions.
What if the election fails?
Spending more money per student is no guarantee of a better education. As a matter of fact, many of the larger schools have a higher millage rate, but people are still moving to smaller communities because they believe the schools are better.
When the millage increases, much of that tax income goes not to the schools but to pay interest on the debt ($3.37 million last year). If you take out a 20 year home mortgage, and then 10 years later refinance your home at a higher interest rate over 30 years, a much higher percentage of your mortgage payment is going to pay interest. It makes sense to refinance if you can pay less interest, but that is not what is happening here. If you have never borrowed money to buy a house, then ask someone who has. Although the school district is not taking out a mortgage, they will be taking on additional debt if the millage increase passes.
Property taxes are just one of many expenses that landlords pass along to their tenants. Ask your landlord if you doubt it. The same thing applies to any business - when their taxes increase, they pass along that increase in the form of higher rates. This includes utilities which pay a substantial amount of property tax already.
It has been about 9 years since the last millage increase. What if in another 9 years the district needs to borrow even more money. I am guessing that even a greater percentage of tax revenue will be wasted on debt service (interest).
What if growth does not continue as projected and tax revenue falls below that required to pay the debt we are taking on for the next 30 years? The state guarantees municipal and school bonds, so those who do not pay state taxes do not have to worry about it. The rest of us will be bailing out the school district.
If you have children in school, then by the time this proposed loan is paid off, they will likely have their own family. Do you really want your children and perhaps grandchildren to be burdened with a 30 year debt that you may have voted for in 2017. If we continue the cycle of refinancing at higher rates, even 30 years from now in 2047 the debt may still not be paid, and the percentage of revenue to pay the interest may be much higher.
What if new housing begins skewing away from two story townhouses and toward inexpensive apartments?
What if enrollment stops increasing due to more accessible private school opportunities or other reasons? Do we really want a 30 year debt?
If costs are increasing due to increasingly burdensome paperwork and regulations, then wouldn't it be better to find a way to decrease those costs instead of raising the tax rate?
The irony of being the second most wealthy county in the state is that the Bryant School District annual report classifies 40% of students as low income. Many families are living check to check. What some might consider a small increase in taxes, is a huge increase to those who have trouble paying their bills each month. Raising taxes to the point that teens have to work to support their families and fall asleep in class is not a good outcome for education or our future. Raising property taxes so that lower income retirees can no longer afford to pay their property taxes is not fair to the people who built our community. If we cannot afford to educate students with the abundant income we already have, what hope is there for poorer counties?
Some people believe that raising the tax rate will increase their property values. Would you be likely to pay more for a house because the property taxes are higher? You would be more likely to pay more for a house because the schools are better, but higher tax rates do not automatically ensure better schools. If that were true, then Little Rock and other high tax districts would have better schools than Bryant.
A few years ago we sold a house for a little over half its assessed value. What the county assessor says a house is worth may be based more on wishful thinking than reality. New home buyers are usually happy that they paid less for their house than "what is was worth," but when they figure out that the county assessment is too high, they are not so happy, and not so eager to increase the amount of their property tax.
The district has already purchased 45 acres in the Hilldale area and will build a new elementary school there regardless.
A junior high school could be built, or perhaps middle schools could convert to junior high. Moving 9th graders from high school to junior high would solve problems such as overcrowding at the high school cafeteria, band and choir.
Teacher salaries may remain frozen. From the last millage increase in 2008 until 2014 revenue increased enough each year for teachers to get raises. One reason for the current teacher pay freeze is said to be because many class sizes were near the state mandated cap, so increasing student enrollment required new teachers to be hired. If each middle and high school teacher teaches 5 classes per day, then each new teacher results in 5 different classes going well below the maximum class size. It should not take very long before the number of new hires goes down, and teacher pay can once again increase along with increased annual revenue to the district. Even if the tax increase passes, will teacher pay be frozen again in another 4 years? Do teacher pay freezes and the promise of raises constitute bribes to convince teachers to support tax increases?
Annual interest payments remain relatively low for the next 11 years, or until the next millage increase.
The Bryant Schools millage page has more on the likely
results of a failed election.
I disagree with those who believe that teachers are overpaid. However, relatively low pay or lack of raises is only one reason that teachers leave the profession or retire early. Many do not like the ever increasing red tape, federally mandated common core curriculum, and blame-the-teachers attitude. Retired teachers are often asked if they miss teaching. Some of them will wisely reply that yes, and that is why they retired. We should let teachers adjust their approach to teaching for each class and individual students instead of mandating a one-size-fits all approach. So even more important than pay increases, is allowing teachers the freedom to teach by the methods that work for them and their students.
It seems that the school board has given up on building a new high school north of the interstate. Maybe the message was not that the public opposed a new high school campus, but rather that the rapidly rising income from present taxes should have been sufficient to pay it. Instead of building an extravagant new building at the present high school, perhaps the money should have been spent on a new high school campus.
Here are some facts and figures as I understand them. I encourage you to do your own research - don't take my word for it. Most of my information comes from the following sources:
The Bryant School district has an
informative web page that presents their case for a tax increase. On Tuesday February 21 a
pro-tax increase group along with members of the Bryant School District held a well-organized public meeting at Bishop Park. The Bryant Public Schools
annual report, and
Arkansas Department of Education reports.
The school district wants to raise $65 million. If the millage increases is approved, the existing debt of $11.5 million will be refinanced at a higher interest rate and rolled into the $65 million resulting in a $76.5 million 30 year debt. Last year debt service (interest) cost $3.4 million. The new interest rate will be higher, and the loan period will be longer. At the 2/21 meeting I heard that debt cost (interest) on the $65 million new debt will be $42 million. If that is correct only about a third of the money raised by the tax increase will actually benefit the schools – the rest will be spent on servicing the debt (interest).
Are there other alternatives to such a long and expensive debt? The answer I heard at the 2/21 meeting was that in order to receive $36 million “Facilities Partnership Program” matching funds from the state, this was the amount needed. It seems to me that people seem to think of this as “free” money and worth paying $42 million in interest to get it. This seems to be just another step in the state taking over control of local schools.
The argument that state matching funds per student are not enough may have some validity, but the increasing property tax revenues from new expensive (well above the $150,000 average value of) houses being built should more than compensate for that.
If you live in the Bryant, AR School District, please vote. If you do not vote, you are allowing the majority to decide for you. The last millage election failed by just 8 votes. Your vote is important.
On election day I participated in a lively discussion of the issue, part of which you can
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Charles Young You have permission to copy and use all or any part of this page with the condition that you attribute Charles Young as the author. A link to this page would be appreciated.