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Schools initiate new tax levy

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Yellow Springs school board members faced a room of empty chairs last week as they discussed a school tax hike at their “committee of the whole” meeting on Thursday, March 22. The new tax would be the first school property tax increase in 10 years and is sorely needed to dig the district out of several years of deficit spending with no better solution in sight, according to school board members during the meeting.

While the board would still like feedback from the public on how much of a tax to levy, board members considered a new five-year emergency property tax in the range of 7.5 mills in order to generate the annual $750,000–$850,000 recommended by District Treasurer Dawn Weller. The levy would cost Yellow Springs property owners approximately $230 per $100,000 of property valuation, as appraised by the Greene County auditor. The levy would be put to voters on the November 2012 ballot.

School board members discussed the need for new money to keep the district from slipping into a negative cash balance which would occur within the next three years given the current budget, according to the district’s financial forecast. The board also referenced the difficulty a tax increase could cause for many local residents, some on fixed incomes.

“A lot of people in our community might not be able to afford this,” board member Angela Wright said during the meeting. “People are still paying the current operating levies, plus the new levy…many have said to me, ‘please, I don’t want to have to be pushed out of my village.’”

But according to board member Benji Maruyama, a new tax of at least 7 mills “is the only way to end the next five years in the black.” And the levy will only serve to extend the cash balance, at which point the schools risk facing another wave of deficit spending.

“It’s not a plan for long-term fiscal solvency,” he said.

Maintaining strong schools is good for the community, several board members agreed. “There is a direct correlation between property values and good schools,” Board President Sean Creighton said.

“Schools bring life and heart to the community,” board member Aïda Merhemic said.

The revenue from the levy is the amount the district needs to balance its cost-heavy budget and help extend its cash reserves to at least the 2016–17 school year, according to the forecast. The district managed to cut about $727,000 in annual expenses over the past three years. But due to flat revenues from declining personal property and income taxes and state funding, this school year the district still spent $725,000 over revenue. At that rate the current cash reserves will be spent down to zero by the 2014–15 school year. At that point, without any additional finances, the district risks being taken into receivership by the state, according to District Superintendent Mario Basora at the meeting.

Yellow Springs residents currently pay a 1-percent income tax levy that generates $1.1–$1.4 million annually and four types of school property tax levies that generate an annual $4.1 million and have not changed over the past 10 years. The 31.78 mills in current property taxes that go to the local schools currently cost property owners $973 per $100,000 of property valuation. The property tax levies include a 20-mill current expense levy, which was established in 1976 and is currently generating a state mandated level of revenue for the district. Residents also pay an 8.3-mill emergency operating levy, a five-year levy that runs out in 2015. The 2.4-mill bond levy was used to renovate all the district’s school buildings and will be paid off in 2027. And the 1.08-mill permanent improvement levy, which runs out in 2013, can only be used to maintain the district’s facilities and to purchase equipment and technology. The district plans to try to renew the permanent improvement levy next year.

The new emergency levy would be a fifth property tax for the local schools. The school board has not officially decided on the amount of the levy. School board members said they planned to seek community feedback and continue to discuss details at the next school board meeting on Thursday, April 12, at 7 p.m. at Mills Lawn in the John Graham conference room. The board hopes to come to official agreement on the levy amount by May and will begin organizing a levy campaign this month.

Click here to view a property tax chart for the proposed school levy.


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