I asked for some various scenarios of projected revenue with varying levy rates because I am concerned about the ethics of what was suggested and has been practiced in the past. As was noted during the July presentation about the tax levies, there is a legal cap on the amount of increase in revenue the district may receive, not greater than the lower of the CPI or 5% (you might remember that our financial advisor Mr. Kinder even remarked on the surprising fact that the CPI was a higher option over the 5%.) Note that the cap on the increase still allows there to be an increase, it just prevents the increase from being too much. According to the law*, Missouri Statute 137.073(2), if the projected increase in revenue exceeds that cap, school districts are required to reduce their levies so the increase in revenue will not be as high. The community has observed with great disapproval the past practice of the District – a practice which motivated a repeat recommendation in the presented numbers again this year — of quietly raising the levy rate in the debt-service fund so as to off-set the required rate drop in the incidental fund, thus skirting the law’s requirement to lower the taxpayers’ burden when the increase is so great.
But isn’t that money in the debt-service fund needed to be used to pay down debt? Perhaps that might make that maneuver of money excusable to some. But it’s not actually used for that. The observed practice of the District has been to then ask voters to move the money the following year back to the incidental fund for spending on general needs, thus technically avoiding the requirements of the law by temporarily “hiding” it in another fund rather than actually lowering the levy as required (or even using it to pay down some of the district’s astronomical debt of $86.27million.)
Does it make that much difference to the average home owner’s bill? No, it’s probably less than $5. Is it going to cost the District a lot of money? No, it’s about $10,000 less of an increase, so, instead of receiving an increase of $21,465,000 in funds, we could expect an increase of “only” $21,455,000. (That is less than the amount the District pays in annual fees to just one of the professional organizations to which it belongs.) But the amount isn’t what matters. What matters is our ethical responsibility to obey the law. This money belongs to the taxpayers, and we are stewarding it, according to the law. If we are required to lower the levy to give the taxpayers back $1 or $100, then that is what we should do.
So, if we lowered the incidental fund levy to the needed value to meet the legal requirements to cap the increase in revenue to not more than 5% — without raising the debt-service levy — then I could go along with this vote to accept the 5% increase in revenue from the community. As it is, I cannot agree. I would like the reason for my “no” vote recorded in the minutes, and I will submit my written reason to the board secretary pursuant to Policy BDDF-1:
“I am voting “no” on this maneuver of lowering the incidental fund levy while raising the debt-service levy because I cannot in good conscience agree to do something which I feel violates the clear requirements of the law, at least ethically, even if not technically.”
*As written in Missouri State Statutes 137.073, section 2:
mid-paragraph: The inflationary growth factor for any such subclass of real property or personal property shall be limited to [the law describes ways that growth is calculated] … but not to exceed the consumer price index or five percent, whichever is lower.
It then goes on to specifically prescribe the districts’ requirement to reduce the levies.
**Please note that all thoughts and opinions expressed by me are my own.
I speak solely for myself and do not intend to represent the Board to you in any way in anything I say.
I do, however, fully intend to do my job representing YOU to the board! 😉