School District lowers tax rates 3.6 percent
by Anna Adair
The San Juan School District Board became the fifth taxing entity in San Juan County to cut taxes below the state proposed certified tax rate at their June 19 meeting.
After lengthy discussion, the board unanimously cut the rate $75,000 below the certified rate. This will equal a 3.6 percent cut below last year’s rate. Board member Bill Boyle pointed out that it is the third year in a row that the school district tax rate has decreased.
Business Administrator Clayton Holt said if the district adopted the certified rate, total collections would increase by approximately $700,000. However, many state matching levies will decrease, leaving the district with a net increase of $244,509. In the end, with the rate set by the board, the district will collect $170,000 more than in 2011.
San Juan County Commissioner Phil Lyman, who has been a strong proponent of cutting rates below the certified tax rate, said that his target is not the school district but San Juan County in general.
Lyman said he trusts the school board to make the decision they have been asked to make, but added that it raises a troublesome red flag when the county has moved from the middle ranks of taxpaying citizens to the top ranks.
Lyman expressed concern that on the current course, the county will have not only the highest values, but the highest tax rates as well.
“I’m a participant as a business person, as an elected official, and as a father with kids in the schools,” said Lyman. “My interest in this is genuine and sincere and real and I am telling you what I observe in my profession, that this county is in distress, and I think the school board members should really pay attention to the statistics.”
Holt expressed concern that federal Impact Aid payments are declining. He said that for the first time in five years, Impact Aid will go below $6 million. He budgeted $5.2 million.
Board member Merri Shumway said she had at least 16 emails asking for a reduction in the property tax rate and asked that the board reduce a little more.
Holt said a number of districts are transferring money from capital funds to balance their budget, a practice he does not recommend. Holt said it would be heading down a road that is not sustainable and he doesn’t know how you turn around and go back in the other direction.
Board member Debbie Christiansen said she is hesitant to cut money from capital funds as the voters were promised things when they approved the voted leeway, and they need to continue to save for capital projects.
Christiansen presented some thoughts of areas to cut, including health insurance for board members, board travel and the $300 a month stipend that the state allocates for board members.
While expressing a love for extracurricular activities, Christiansen also said she has a hard time swallowing $1 million a year spent on it and would like to see a five percent reduction in extracurricular activities, totaling approximately $50,000.
Shumway suggested a moratorium on in-service training and out-of-district travel. Holt said that 80 to 90 percent of in-service and travel is mandatory and paid by different funding soures. Holt said that in reality, this would not save any money because they cannot take money mandated for training and use it somewhere else.
Shumway suggested a percentage travel cut across the district.
Boyle said he has great concerns over cutting capital funding. “We don’t have the bonding capacity or the taxing capacity to go to our constituents and ask them to fund a bond in 25 years for $150 million. That is what we face in replacing five or six schools,” said Boyle.
“I think this capital program that we set up is the fiscally responsible thing to do. I have a very tough time going back on a voted leeway that was approved by 70 percent of the voters just a few years ago. At the core of my being, despite the heat that I will continue to take for it, I think it’s the right thing to do.”
Boyle said the board has been fiscally responsible and has had lived within the operational budget with no expansions in operations. Boyle had concerns with turning away money when the future could hold significant changes in the tax base.
Boyle said that Resolute Oil, which operates the massive Aneth Oil Field, represents one third of the county tax base. The Navajo Nation has an option to buy out Resolute at any time, which would take the county tax base from $1 billion to $650 million with one signature.
Boyle said he would feel foolish in a few years, if in exchange for a $5 or $6 property tax break on a $150,000 home, the district lost the tax base and missed the opportunity to address very real facility needs.
Board President Nelson Yellowman said he has a hard time reading emails from business people saying the school board doesn’t care. “This is not true,” said Yellowman. “This is all for the best interest of the students to get the quality of education they are entitled to.”
Yellowman recommended that the board follow the advice of the business administrator to adopt the certified tax rate. The motion was seconded by Board member Elsie Dee.
In further discussion, Christiansen asked if Yellowman would entertain not taking the new growth increase of approximately $250,000. Yellowman said he would be willing, but is not sure where to make cuts, which is why he feels they should go with the administration recommendation.
Commissioner Lyman asked, “Why is it that the school district has had a 75 percent increase in taxes since 2004 without batting an eye... but if we talk about a decrease in the rates, its just an impossibility and will create such dramatic cuts?”
Lyman suggested looking at the system overall, look at statistics and the county and the burden on citizens and do what they can to pull it back into line historically and with where other counties sit.
Boyle expressed frustration that “we are going through the couch looking for spare change in the cushions. And I don’t know if that’s the best strategic way to make decisions that are going to impact kids.”
Boyle said he is willing to take the time, and with public input, investigate some of the proposals and actions they are considering.
Shumway expressed frustration and said there are places they could make small cuts. “Maybe it is lose change in the couch,” said Shumway. “But we haven’t had this kind of request from the public over the years, and when the public is asking, I feel like we should get the loose change out of the couch and try to trim as much as possible.”
Shumway said she would be agreeable to the small cut this year if they start looking at areas right away where more cuts can be made in next year’s budget.
Yellowman amended his motion to go $75,000 below the certified rate, which passed unanimously.
Local businessman Britt Barton said, “$10 a year on my property taxes, I could care less. But what just happened, I love it. Whatever it is, it is not the max and I appreciate that. I think it’s great. You don’t have an easy job.”
In other business, the Board discussed the creation of a new fundraising policy for the district. Boyle suggested a once-a-year contact from the schools to businesses in their communities in exchange for marketing.
Boyle suggested that the business should be told it will be a one-time donation for the year, and they will not be contacted by anyone associated with the school for additional donations.
Boyle said it is his opinion that such a policy is necessary. He reports that this fundraising policy, used by Monticello High School, works well and has been well received by the business community. Letters are sent by the principal, businesses donate from several options, and then they are done for the year.
Holt said that 10 percent of the fundraising causes 90 percent of the pain. He suggested a policy that allows fundraising events, but prohibits solicitation such as early ticket sales or door-to-door selling. Holt said this would eliminate the things that are highly annoying and give businesses an easy out, so they don’t have to donate all year long.
Holt said that they would need to have a clear line so there is no confusion and suggested no door-to-door or direct solicitation. Board members also suggested that the policy should eliminate requiring students to sell a certain number of items in order to participate.
The board will put the issue on their next meetings agenda for a draft presentation.