The school bond debt is high & citizens will pay higher taxes over time

The school bond debt is high and citizens will pay higher taxes over time.

I’ve considered this bond debt from many different perspectives: mother of LO students, previous business owner, LOHS graduate, property owner and community advocate.

I’ve asked many questions about this bond proposal so that I was able to understand the language. It was written by lawyers and followed by legislative & financial laws to be acceptable — which I find to be lengthy and confusing.

However, after my research I’ve found that the debt and the longevity of the debt payments will be extraordinarily high and the extension on the current debt rate will be a tax increase.

I have surmised the following rough DEBT numbers:

Current Debt: $94,000,000.

New proposed Debt: $160,000,000.

Interest on new Debt: $90,000,000.

Cost to process Debt: $1,000,000.

Total Debt: $345,000,000.

Yes, I understand it is extended debt;

Yes, it may be paid off sooner than 2040;

Yes, it won’t be borrowed and accumulated all at once; Yes, the bond interest rate is lower because it is a school bond debt;

Yes, the “tax rate” may remain the same as the current 7.491 mills;

Yes, we must stay competitive with surrounding school communities;

Yes, the schools must be maintained nicely for students & teachers;

Yes, good schools are needed for property values;

Yes, we must have good schools, teachers, and administrators to educate our children;

Yes, we need safety, buses, technology, and band programs and; Yes, we must maintain our property properly

My concern is about burdening our community with future debt. The projected payment plan is only based on our current economic growth conditions, our current interest rates and Orion’s current growth projections.

As a community advocate, I am concerned about our residents who are on fixed incomes, senior citizens, poverty exemptions and Orion’s businesses, who have been the backbone of our community.

Businesses that will be competing directly with the newly proposed early child care centers; businesses that may not have a vote on this millage; and all businesses who annually contribute to the School Operating Millage by paying an extra 18 mills to the additional 34.23 mills.

If you are confused about this ballot initiative, please, I urge you to research the complete proposal before voting.

Respectfully Submitted,

Donni (Taube) Steele

Community Advocate, 1982 LOHS graduate, Past, present and future Dragon

 

3 Responses to "The school bond debt is high & citizens will pay higher taxes over time"

  1. Ken   October 17, 2018 at 9:53 am

    How is the interest on the new debt paid? Via the bond? Via taxes?

    Reply
    • Jake Singer   October 18, 2018 at 9:25 am

      The interest on the debt was considered as part of the proposal. It works just like a mortgage. The school district levies a debt service millage each year. That money is used to pay principal and interest on the loans (bonds). The projections are that it will take about 12 years longer to pay off these bonds if we continue to have the same tax rate. If the debt is not paid off in those additional 12 years, the proposal is conservative. The state requirements give the opportunity to levy that same rate for five additional years if more funds are needed due to fluctuations in property values. The chances of the millage rate needing to go up because of this bond proposal are infinitesimally small, but lawyers make LOCS include the word no “expected” rate increase in the proposal, because it could happen if property values plummet by bigger percentages than they did a decade ago without ever recovering like they did in the past decade.

      Reply
  2. K Witte   October 18, 2018 at 12:55 pm

    Thank you Donni, the bond language is confusing and it’s often very hard to get straight answers.

    Reply

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