I am both saddened and angered by the deceptive tactics the Lake Orion Schools administration and board have taken to sell their bond request.
The bond issue is $160 million and, coupled with the associated bond interest ($80.3 million) and loan interest from the SLRF ($10.3 million), the total amount to be repaid is $ 250.6 million. That happens to be a quarter of a Billion dollars. This is 2.9 times the current outstanding debt of $87.7 million. How can this be repaid without additional taxes on Orion residents? It can’t!
Their deceptive statement that there is “no tax rate increase” does not mean that Orion residents will not be paying more taxes. What they are not disclosing is that the current millage rate of 7.491 drops off to 2.545 mills in 2025 and to 0 in 2028. So, their tactic is to add additional millage each year to keep the current rate of 7.491 in place until 2030 and then gradually reduce it to zero by 2041.
The increase in tax dollars for homeowners follows: if your house has a market value of $200,000 you will pay an additional $8,376; if it is $300,000 you will pay an additional $12,564; and if it is $400,000 you will pay an additional $16,752.
The Administration’s terminology ploy between tax rate increase and tax dollar increase seems to be working in confusing taxpayers. In the Oct. 3, 2018 Viewpoints letters to The Review, both Lyndsay Lawless and Andrea Choate state the bond will not increase taxes, yet it will. If there is no increase in millage associated with these bonds, why does the ballot language state “the average annual millage that will be required to retire each series of bonds is 3.99 mills annually?”
In addition to attempting to deceive taxpayers, the Administration and board have displayed a complete lack of planning and are not good stewards of taxpayers’ funds. In 2016 they requested $35 million for a sinking fund which included closing Pine Tree Elementary. Two years later they tell us Blanche Sims is a disaster and should be rebuilt at a cost of $25.7 million. Since the two schools are only 2.7 miles apart and only 10 minutes away, why didn’t they close Blanche Sims in 2016 and consolidate into Pine Tree?
With declining enrollment, Mr. Holt’s position is right on, and we must vote down this bloated bond issue to make the board develop a more reasonable proposal.
Thomas Sanna
Lake Orion
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Thomas, your analysis fails to take into account that the state FORCES local school districts to pass bonds to fix/improve school buildings–the funding model you object to (including interest and longer payback time frames) is the EXACT funding model the State of Michigan has set up as the sole option after decades of disinvestment in education and Proposal A. Is it frustrating? Yes! But no amount of budgeting or cutting can change that. The state gives each local district just enough money to pay teachers and staff and keep the lights on and water running. That’s it. They expect local communities to pass bonds to pay for capital improvements, building refurbishments and repairs, safety upgrades and upkeep. There is no choice–other than to let our taxpayer investments (the buildings WE own) deteriorate for another 20 years OR take money from the operating funds the state gives us to educate our children. If the safety of our classrooms is in jeopardy and we have to take choice #2, that means something else has to go–like teachers, who are the most important component in our children’s education. Cutting teachers means higher class sizes, no art/music/dedicated physical education (specials), no teams at the middle school–the list goes on an on and each of it is devastating.
I appreciate you diving into the numbers–and I know that school funding is a confusing mess in our state. But look around you. Every local school district is in the same boat and their communities are doing what it takes. Yes, this means we would pay the same bond (tax) rate for a longer period of time. But the fact remains that our tax rate (what we pay) won’t be any more than it was last year or the year before. I don’t think that’s deceiving. I think that’s a much better reality than surrounding communities, who passed bonds with longer time frames AND increased tax rates. We cannot wait until 2025 to fix our crumbling schools–and the safety improvements in this bond are long overdue.
It isn’t just the wealthy areas that are saying the education and safety of the children in their communities are important–Oxford passed a bond. Pontiac passed a bond. Southfield, Brandon, Clarkston, Lapeer–they all passed bonds to enhance the safety of their schools and improve/repair their buildings. Not because they wanted to–but because a voter approved bond measure is the option the state gives us to do what we have to do (technically, I guess 40-50 kids in a kindergarten class is an option, but it’s criminal.)
This is not about luxuries–this is about giving our students a safe and secure place to learn and grow. We are better than this, Lake Orion Let’s do better by voting yes.
Tthomas, Another point that is really not talked about is the true cost of the bond. Yes, the board states that it is $160 million, but just like your house mortgage, we pay interest. Read that most municipal bonds are 5 to 6% interest, this means that year 1 interest on this bond is $9.6 million. This is almost $10 million dollars that will not go toward a single student. Have read that the 7.49 millage would collect $14 million, meaning we shave off $5 million in the first year. I do not see how we are going to be able to eliminate that 7.49 mill by 2041, Especially knowing that right now we still have $80 million in outstanding bonds that are at least 15 years old.
The district is on the right path with the sinking fund. Spend what you have, we basically just got a brand new football and track facility and it is paid for NOW. Not in 2024, 2030 or even 2041. NOW. The district has also replaced a lot of boilers and other building critical systems and they are paid for, NOW.
I’m all for improving our school systems and even rebuilding an extremely overage building, but we need to stop with the debt cycle. I truly thought we were with the sinking fund, and honestly if we could I would say we should raise millage up to the legal limit and save up for a new elementary school. Given today’s sinking fund rate, we could afford a new school paid in full in less than 10 years from now. As is we will continue the debt cycle, as we will always need new schools, upgrades, etc. I expect the board to be back to us in 5 years needed more capital funding.
The board needs to continue down the path they started in 2016.
Said another way, a home’s market value could be $300k but the taxable value could be $100k. That means their tax affect would be $4k less than what you stated in your article.
Thomas, Thank you for your analysis on the tax dollar increase, it was very helpful; however, I think it may be a little misleading for some readers.
Our tax bills follow the taxable value rather than the market value. The market value only matters when a home is sold and the taxable value is adjusted up or down to equal 50% of the sale price. So if you bought your home years ago, the value today does necessarily affect the taxable value.