On August 2, taxpayers are being asked to vote on a proposed sinking fund to support capital improvements in facilities, including repairs, renovations and replacement projects. If approved it would levy a tax of 2 mils for a period of 10 years with no further opportunity for taxpayer review. A decade without accountability.
Sinking Fund supporters urge a yes vote based simply on the stated purpose of maintaining facilities to a high standard that will keep the district in the top echelon of school districts – – -a difficult objective to oppose. However, there is no discussion about the sinking fund term of 10 years nor the underlying revenue generating assumptions in relation to the projects outlined in supporting documentation.
The sinking fund is projected to generate an average of about $3.5 million in revenues annually based on the assumption of a 1% inflation rate on the district’s current taxable value of about $1.7 billion. An average home with a market value of $200,000 and taxable value of $100,000, would pay a tax of $200 per year, or more than $2,000 over the life of the sinking fund.
Casual observation of ongoing development in the district makes the revenue assumption seem very conservative. The state inflation assumption is 2%+. Currently, there are single family homes being built as well as major residential complexes underway, new senior housing projects starting up and significant commercial projects being initiated, particularly along the township’s southern border. All will add dramatically to the tax base and more development is likely. Sales of existing properties will also cause tax revenues to jump significantly as Prop A tax constraints – – -5% or the rate of inflation, whichever is lower- – – are released at closing and taxable value jumps to 50% of the purchase price. For example, on one current pending sale, the new owner’s tax payments will rise 30 to 40%. Real estate sales have been strong and prices are up significantly. In short, revenues will likely be higher than projected.
Bottom line on the sinking fund proposal: Vote NO on August 2. No decade-long blank check.
Have the School District modify the Sinking Fund proposal for reconsideration in November, incorporating a term of 4 years that provides accountability to taxpayers based on revenue generated and projects initiated. Review and explain the revenue forecast in terms of underlying assumptions, including new construction and realistic taxable values. And, then move forward to ensure that the necessary projects are initiated and completed to maintain a top performing school district with excellent facilities across the board.