Prepared Notes for Board Meeting – Levy

August 10, 2009

Marc A. Schare

 614 791-0067

marc9@aol.com

 

 

Let me start by taking a moment to thank the administrators for generously donating thousands of dollars apiece to the general fund of the district.

 

Tonight, we come together to reach consensus on a levy decision that will have a profound effect on the future of Worthington Schools. We face a financial projection that demonstrates that taxing even another $500/year for the average household is insufficient for supporting the districts spending plan after the next 3 or 4 years. We have an even worse political reality. In correspondences across the ideological spectrum, our constituents have told us to get a handle on district spending. We’ve been told in letters and emails that absent a change in compensation packages, a levy will not be passed and we’ve been warned by the overwhelming defeat – 59% to 41% of the Columbus City Income Tax in the Columbus precincts of our district that there is little appetite or ability to pass tax increases of any kind. Tonight, the message from constituents could not be clearer – they want spending reform in this district, they want it now and they want it with the smallest possible impact on programs.

 

There is little doubt that the economy has played a huge role here. Retirement savings have been cut by 40%, retirement income in the form of CD’s has been slashed to almost nothing, The CBO says social security will been frozen for the next three years, health care costs for seniors are skyrocketing, unemployment in Ohio is escalating, home prices are no longer providing the equity to allow people to live on debt and even among the working, salaries and benefits are being cut or frozen. It is small wonder that most people concede that a property tax increase at this time is a tough sell.

 

So, what to do. A few weeks back I floated the idea of a 3.5 to 3.9 mill levy that would support the district through 2012 and, in conjunction with reductions in the rate of spending increase make the size of the next levy manageable – perhaps in the area of 7.4 mills. That plan is viable only if Worthington Schools commits to a phased in program of systemic change that allows our expenses to increase at a rate which the community believes can be supported. Lacking such systemic change, the day of reckoning may be extended with a small levy, but it cannot be avoided. The main advantage of the smaller levy is that it might actually pass.


 

The other levy under consideration is the incremental levy. The main difference between my approach and the incremental levy is that the incremental levy gives the district one more year to plan for and implement systemic change, however, the smaller of the incremental levys provided by the administration provides for 6.9 mills as a continuing amount which would be, I’m sure, comforting for the district but not so much for the taxpayer that would see property taxes increase each year. It is a gamble that people will focus on the 3.9 in the first year and ignore the 6.9 ongoing millage. A smaller incremental levy, perhaps increasing from 3.9 mills to 5.9 mills might fare better and is one which I might find more palatable.

 

For me, I will reiterate that so long as the focus of our discussion is on revenue generation options, it almost doesn’t matter what size and type of levy we choose because over time, the amount collected must, by definition, be the same – the amount necessary to pay for the districts spending plan. In all of these options, the spending plan calls for a continuation of annualized salary increases in the 2 to 7% range, annualized health care increases of 13% in perpetuity and more or less status quo in other expenditures. These expenditures call for a 4.7% increase this year, another 4.8% next year and then 5.2, 5.3 and 5.5% increases through FY14. This is, in my opinion, unsustainable. It should be noted that at least two parts of this are not our fault. The Governor’s mandate for all day Kindergarten has a dramatic effect on the budget starting in FY12 and while I disagree with the treasurer’s assumption that community school tuition will rise by 20% annually in perpetuity, clearly, it will continue to rise by a non-trivial amount and it’s not unreasonable to assume it will consume well over 25% of our state aid by the end of the forecast period.

 

Nevertheless, whether caused by ill-advised mandates or factors within the district’s control, the unmistakable message I’ve heard from constituents is that this spending plan is unsustainable and without reform, a levy will not pass. I see no reform in this plan. The governor mandates free all day Kindergarten as an unfunded mandate, we need to cut somewhere else. Senate Republicans want unlimited autism scholarships, we need to cut somewhere else, not just if a levy fails but as a matter of survival. We cannot continue at this run rate in perpetuity and the longer we wait to start addressing the problem, the harder it is going to get.