Monday, February 11, 2008

Olentangy Ballot Issue: Fuzzy Math

From the district's ballot issue FAQ page:
What is on the ballot for Olentangy?
The March 4, 2008 request will include a combined bond issue and operating levy issue. The bond portion of the issue will appear on the ballot as 1.8 mills but will be collected at .82 additional mills. Olentangy is able to collect at a lower rate due to our rapid growth and debt repayment structure just as we did for the bonds for the 2004 and 2005 ballot issues.
In reality, the .82 advertised mills are a result of a number of factors, including the current over-collection of debt. That's right, the district is collecting more mills than it needs to keep the current bond millage high so that the additional millage on the ballot, and advertised by Olentangy for Kids, appears low.

I'm not going to go into the arcane world of school bond taxation save to say that the taxpayers vote on debt, not mills. And, that what appears to be is not always so.

Back check: Does anyone really believe that the district -- or anyone for that matter -- can miraculously have bond mills that remain steady between levies?

Of course not. There are too many volatile factors for the mills to neither increase nor decrease. The millage rate should have reduced over time -- due to a conservative bond structure and assumed valuation growth -- yet it continues remain at 7.9 mills.

The district continues to ask for 7.9 mills from the county auditor so that the advertised mills appear lower. But, you've been paying too much year over year.

Funny how they forget to mention that little fact.

1 comment:

Paul said...

Jim:

Bond levies and Operating levies differ in a couple of ways. One is how much actual money is collected over time.

A bond levy does two things: a) authorize the school district to sell bonds that have to be repaid, with interest, over some period; and, b) to collect property taxes from the property owners in the district to service the debt.

The amount per year that needs to be collected to service the debt doesn't change, so as more homes and other properties are built in a community, the contribution from each property owner actually goes down. Eventually the bonds are retired and the levy is removed from the tax burden.

Operating levies are set up so that when a levy passes, a specific dollar amount is collected from each property. However, for the life of the levy (which is forever in the case of a Permanent Operating Levy), that dollar amount never changes for that property. This is due to HB920, passed in the 1970s - a law much hated by most school administrators and one they want to do away with via the proposed Getting It Right For Ohio's Future funding amendment.

The basic school funding mechanism is very simple in Ohio, but we let all these details muddy the picture so much that most taxpayers don't bother trying to understand.

I think it's the job of folks like you and me to help people break through the fog and understand the basics.

And the most basic fact of all is that the homebuilding industry controls the municipal politics of central Ohio. If we want to change that, we need the General Assembly to give us Impact Fees as a school funding alternative.

PL