Thursday, December 14, 2006

Saving "the taxpayer"

Olentangy Superintendent Davis believes that new operating millage is needed in November 2007 even though the district's own documents filed with the Ohio Department of Education show otherwise. The latest ploy is for Davis to imply that waiting to until 2008 may "be more costly to the taxpayers."

More costly than what? Than the Davis solution of increasing the tax burden of the average taxpayer a year or two early by an additional $700 per year? I'm not following any of the logic behind this supposed tax savings.

OK, just the facts. Based on the current rate of increasing expenses, the district will have to take a short-term loan in FY09 in order to meet a cash-flow shortfall during that year. The loan is required since the first payment on a 2008 levy would not be received by the district until April of 2009. [1]

Hypothetically, taking a loan could have an adverse effect on the district's bond rating. But, the district took a $10 million dollar loan in FY05 and saw no reduction in its bond rating. Yes, it is true, a bond rating reduction may occur, but history shows otherwise.

That said, we know that a new levy will raise taxes; there is no hypothetical may here.

Once again, Davis is not discussing cost savings he claims to have found. The administration commissioned a study - which I mentioned in a previous post - that found close to $20 million per year in possible reductions if the district were to reduce costs by only offering the state minimum requirements. Now, I am not suggesting that the district make such drastic cuts, though some of the identified reductions in expenditures could be implemented without reducing opportunities for students. But first, the study needs to be reported to the board and community, and discussed publicly. [2]

The report is intriguing because it does not glaze over areas where the district is spending higher than peer districts. It plainly shows those areas where Olentangy needs to reduce costs.

My fear is that the administration will withhold the report long enough that they can claim it has lost relevance due to age. A great strategy for the district, but not for the taxpayer.

Back to levies, loans, and dollars. Should Davis implement his supposedly identified reductions, the district would not face a cash-crunch in FY09 as they would not need a levy until Spring 2009. So, this spin of loans and hypothetical costs appears to be nothing less than hogwash.


[1] A very similar situation occurred in FY05, where the loan also allowed for a reduction in millage.

[2] I will be uploading pages from a draft version of the report from time-to-time; it's big. You can request a copy from the district through a simple public records request. Keep in mind that current law allows anyone to obtain a copy of public documents without signing a form or presenting ID. Simply pay the per sheet cost and the report is yours. Or, read it here.

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