The Board of Education (BOE) held a special meeting to correct an error they felt they made that would have given the District an extra $1 million. Instead of keeping with the originally proposed tax rate of $5.18 that they approved, they re-voted and agreed on the tax rate of $5.1352.
The $5.18 would have given FHSD about $1.2 million in surplus. In contrast, the tax rate of $5.13 will give only $200,000 in surplus funds. Students at North shouldn’t expect any change in how their school normally functions for the rest of the school year, but due to the $5.13 tax rate only collecting about a $200,000 surplus, cuts may have to be made in the coming years.
“At North, the question comes in ‘Is it necessary we spend that money now?’”BOE Director and supporter of the $5.18tax rate, Marty Hodits said. “‘Can we put that off until a later date?’ That’s what will happen throughout the District.”
Though missing out on the extra million won’t affect FHSD this school year much either, in the coming years, the District and its schools will have to prepare for a steady decrease in the amount of surplus they will have at their disposal. At the beginning of the 2011-12 school year, FHSD started out with a $39.4 million surplus, but by the beginning of the 2015-16 school year, it is projected that they will start the school year out with a mere $2.8 million surplus due to the approval of the $5.13 tax rate. This loss of reserve money means that more programs or staff members could be subjected to the chopping block in the coming years, especially if the assessed valuation of the District continues to decrease as it has in the past four years.
“For this year, it will not have much effect if the state government gives us all the money they say they’ll give us,” Hodits said. “If they don’t give us all the money they say they will, then we’ll be deficit spending. We’ll be spending more than we’ll collect.”
The Money Trail
At a BOE special session on Sept. 28,the FHSD board passed a revised tax rate of $5.1352. At the regular meeting on Sept. 15, the Sloan administration originally proposed a tax rate of $5.18. This motion was passed 4-3, but President Mike Sommer and Director Mark Lafata requested the special session to re-discuss the amendment. By the end of the Sept. 28 meeting, the BOE overruled their original vote by passing the new rate of $5.1352.This motion also passed 4-3.
“I believe the intent was we should be considerate of tax payers,”FHSD Chief Financial Officer Kevin Supple said. “Reduce the rate by five cents. $5.18 to $5.13 is giving back five cents to tax payers.”
FHSD receives their revenue by taxing the personal property of FHSD boundary residents (houses, cars,boats, etc.) and the personal property of FHSD boundary businesses (items they have for sale). Due to a 3 percent decline in assessed valuation, the tax rate had to be increased to make the District revenue neutral. Because of this circumstance, the average tax payer will have little to no increase on their bills starting with the next one they will receive in late November and until the tax rate changes.
“For the average tax payer, [they] would not have increased taxes,” Supple said. “I don’t think tax payers will even notice.”
One reason for such a decreasein the surplus over the years is thatthe money FHSD receives from taxpayers isn’t permanent. In 2004, tax payers voted for a five-year-long, 20 cent sunset provision. This meant that in five years, they wanted 20 cents to come off of the tax rate. In 2009 when the levy expired, FHSD resident voters granted FHSD a five year extension to the sunset provision. This means that unless the BOE doesn’t vote to change the tax rate again, in 2014 the tax rate will go down to $4.93 from the current tax rate of $5.13.
“I would absolutely not be com-fortable with them keeping it,” FHN parent Mary Kranzberg said. “Onlyif they could invest it. If they returned the money back to the people then we could make money on it”
