There was little surprise a few weeks ago when the Palm Beach County School District sought to partner up with the county and 38 municipalities on a proposal to increase the countywide sales-tax rate to 6.5 cents per dollar from the current level of 6 cents.
The proposed increase would give the school district 40 percent of the roughly $110 million in anticipated annual revenue.
Before the issue could even get before the County Commission, however, schools Superintendent E. Wayne Gent fired off an email to his county counterparts asking that the district be removed from the proposal.
Again, no real surprise here. Voter-approved tax increases, despite an improving economy, are a tough sell. Also, the school district’s capital budget hole is far deeper than what its share of the proposed revenue would have been.
The math is simple. The district is projecting an $87 million shortfall in its 2014-15 capital budget. That hole coming into the current school year was around $60 million. But district officials managed to shrink it by deferring maintenance for, among other things, school buildings and buses, and taking money from elsewhere in the $2.3 billion budget.
The most they could have hoped for out of the projected revenue from the sales-tax hike was about $44 million. Again, do the math.
By the way, the capital budget covers such things as technology, transportation and maintenance. Back in February, district Chief Operating Officer Mike Burke warned the school board that its problems “had been brewing for some time.” At the time, he said the decline in the county’s tax rolls, as well as a cut to the district’s ability to levy taxes for capital funds, had meant a nearly 40 percent drop in funding over the past five years.
To be sure, property values — and tax revenue along with them — have been making a comeback after the real estate bust, but nowhere near enough to make up for the lack of tax revenue from the Public Education Capital Outlay (PECO). The Legislature, in 2009 and 2010, cut this property tax that school districts could levy for capital projects from $2 per $1,000 in taxable value to $1.75 and $1.50, respectively.
As we said in an Oct. 4 editorial, the school district’s 2013-14 budget summary notes that “Capital millage proceeds have dropped from $323.4 million in (the 2007-08 school year) to a projected $202.5 million” in the budget just approved. If the Legislature had restored that property tax last spring, the district could raise an additional $66.6 million for construction and maintenance.
The school district is lobbying to have that 50 cents restored. The lack of success in those efforts is undoubtedly part of what has led to the recent friction with its Tallahassee lobbyists. Board members balked this month at paying longtime lobbyists Vern Pickup Crawford and Ron LaFace $173,000 for one-year contracts, questioning them about putting other clients’ needs ahead of Palm Beach County’s.
Additional budget pressure is coming next year, which will be the final year of the voter-approved quarter mill (25 cents of property tax for every $1,000 of taxable value) designated for fine arts and choice programs. This school year, it’s bringing in $33.3 million, according to the district.
To keep that revenue for the operating budget, the district may go to the voters for as much as $1 per $1,000 in assessed value in November 2014.
That’s why signing onto a sales-tax increase with the county and municipalities made little sense: too much risk for not enough reward.
Better to take another shot at lobbying the Legislature to step up and restore the 50-cent mill, as well as update the PECO fund to bring in more revenue. That’s revenue Jeffrey Eassa, principal of Woodlands Middle in suburban Lake Worth, needs just to paint his school’s halls for the first time since it was built in 1995.
“The building itself, I don’t want to say it looks run-down … It needs attention. That attention just hasn’t been there,” Eassa said at a district budget advisory committee meeting in April. He added that the condition of the buildings is of concern “because that’s what our community sees.”
The question now is whether they can make the Legislature see it as well.