Majority commenting at Lindbergh forum favor tax-rate hike
January 12, 2005 - By SCOTT MILLER
The majority of Lindbergh School District residents com-menting at a public forum last week favored a possible tax-rate hike, but others were not supportive, saying taxpayers should not be the source of additional revenue.
Lindbergh Board of Education members and administrators sponsored the forum to answer questions and gather community input about possibly placing a tax-rate increase on the April 5 ballot. The district's Citizens' Budget Com-mittee made the recommendation after reviewing Lind-bergh's past and projected financial climate.
Nearly 90 people attended the Jan. 6 hearing. Some submitted written comments, while others directly addressed the Board of Education, but the theme was overwhelming: Lindbergh students posted the highest scores on state-mandated tests this year when compared to neighboring school districts, while Lindbergh had the lowest tax rate in St. Louis County.
"We're at the top of the academic scale ... and yet we're paying very little for it relatively speaking," said Randy Tobler, a self-proclaimed "skeptic who has turned an advocate'' for a tax-rate increase.
Tobler changed his mind about a tax-rate increase after serving on the budget committee.
"It became clear to me that the Lindbergh School District lives in the rarified air of those organizations that exceed expectations and yet don't ask much in return,'' he said.
Resident Joe Gabris told Board of Education members, "I think what we're getting is a bargain for our dollar. My last kid is going to graduate next year. I have no reason to want to support this thing other than the fact that I've seen my kids and the kids they hang around with and the neighborhood kids turn into wonderful human beings."
Many other residents submitted written statements urging the board not to increase class sizes, cut gifted programs, charge student fees for participation in extracurricular activities or sell corporate naming rights for district facilities or educational programs. In their written statements, they said they would support a tax-rate increase because Lindbergh schools attract business and boost their property values.
A possible tax-rate increase angered others, however, who said Lindbergh officials are underestimating the school district's future revenue growth and should look for savings by cutting middle management, construction "waste" and com-puter software costs.
A few wrote comments saying they are sick of paying higher taxes.
"I have 53 years experience in construction and I have seen waste go in this district that turns my gut," resident Gene Paszkiewicz told the board, referring to "unneeded" playground restoration and an inefficient bus route.
"Lindbergh does not need another tax increase because it has a tremendous amount of money in the bank and I'm not talking about the $22 million reserve fund. I'm speaking of the savings accounts of new developments, new businesses and new tax revenues that are flowing into this district," Green Park Chamber of Commerce President Jim Smoot said.
"A small example is 12 villas on Sappington (Road) from $300,000 each; five estate homes on Sappington (Road) from $500,000 each; six estate homes on Lind-bergh (Boulevard) from $700,000 each; 14 luxury estate homes on Old Gravois from $700,000 each; 35 luxury homes at Tapawingo golf course from $500,000 to $1 million each; 44 luxury condominiums on Rott Road from $700,000 each,'' he said, also noting several commercial developments.
Growth in the tax base is capped at 5 percent or the Consumer Price Index, whichever is less, so the district's tax base doesn't jump annually as much as new development would indicate.
In addition, some commercial developments have used tax-increment financing, or TIF. In a TIF district, tax receipts for school districts, fire districts and other taxing entities are frozen at existing levels for the length of the TIF — up to 23 years. As land within the TIF district increases in value, the incremental tax revenue — 100 percent of property taxes and 50 percent of sales and utility taxes — is used to retire the TIF obligation.
The incremental property tax revenue, also called payments in lieu of taxes, or PILOTs, are deposited into a special allocation fund that is used to retire the TIF obligations.
In effect, the tax money Lindbergh receives from that particular area remains stagnate, which creates a drain on school funds because the school district most heavily relies on property tax revenue, according to Pat Lanane, Lindbergh's chief financial officer and assistant superintendent for finance,
Lindbergh loses about $1 million each year to TIF districts, Lanane said, adding that the district is "saturated" with businesses and homes, leaving little room for new development.
"Some of these are in TIF districts, but those TIFs are going to be retired and that money will flow into the district," said Smoot, who has collected 105 signatures for a petition denouncing any tax increase for the school district.
In response to a question, Lanane said a 10-cent increase per $100 assessed valuation would cost a homeowner with a $100,000 residence about $19 more per year on average. The district would need a 56-cent increase to break even the next five years, he said.
Smoot's wife, Rose, also protested any tax-rate hike. She is a certified public accountant and a former fiscal officer at the Webster Groves School District.
"Taxation is out of control," Rose Smoot told school board members. "I don't think we've taken the corporative approach to efficiency. A corporation looks within to find efficiencies. They don't run to consumers to raise prices right away. You've got to review every perk and boondoggle.
"And I mean nothing is sacred except the teaching staff and the educational materials. You've got to look outside the box,'' she added.
Board President Mark Rudoff said, "We're here because after 12 years (since the last operating tax increase) we have done the best we can with what you've given us. We have tightened the belt. There's no blood left in the turnip."
Before hearing public comment, Lanane briefly discussed district finances, saying revenues are flat while expenditures continue to grow. District administrators and board members then responded to written questions on a variety of topics for nearly an hour.
Responding to a question about what spending cuts have been made, Lanane said, "I'm looking here at a list of reductions that we've made over the last couple of years and we've tried to look at areas that do not directly affect the classroom ... A director's salary was reduced. We did eliminate early retirement incentives for a program for administrators, which is currently offered to teachers ... We did reduce travel for administrators. We have reduced memberships and limited those for administrators. We have in some cases reduced positions in terms of support service staff positions ... A lot of districts have another layer of management between — of what I like to say — the top level and the school level. We do not have that. In 2003-2004, we reduced the budget by about $2 million ..."
Without additional revenue, Nancy Rathjen, assistant superintendent for curriculum and instruction, told the audience that educational support services such as tutoring would have to be cut, reducing Lindbergh's ability to consistently place higher on state assessments compared to neighboring districts.
"We scored at the top of all of our benchmark districts," she said. "There are many support systems that we've put in place in order to do this — reading specialists, math specialists, after-school instruction, materials for after-school instruction. All of those support programs cost a great deal of money."
Another popular question concerned the district's need for a $22.25 million reserve fund, which is nearly 50 percent of its operating budget.
"The reserve equals financial stability. We know we have — we're like any other business — a certain amount of capitalization. The No. 1 reason businesses fail is from lack of capitalization," Lanane said. "We have that safety net. It's there and protects the children. It protects their education. It's kind of an insurance policy. Without that, you're really going year to year. There's some districts that are distressed and that's a terrible situation. They can't think about the future; they can't think about any new programs to help students; all they can think about is making it through the end of the year.
The reserve fund also "provides revenue," he added. "Many years it's been $1 million from investments that is added to the school district that the taxpayers don't have to spend."
And without new revenue, the expenditure-revenue gap will grow year by year, creating a greater drain on reserve funds each year, Lanane added.
"So as nice as they look, it can go away extremely quickly," he said.
Based on Lanane's figures, the district will spend about $1.08 million in reserves by the end of its current fiscal year June 30, roughly $1 million less than originally anticipated. Next fiscal year, Lanane foresees spending nearly $850,000 in reserves, considering no tax increase is approved.
Board members have not decided how much of a tax-rate increase they may seek in April or if they will seek one at all.
The board was scheduled to meet Tuesday night — after the Call went to press — to review a district survey conducted by the Chilenski Strategy Group.
The board also has scheduled a special meeting for 7 p.m. Tuesday, Jan. 18, to decide whether to put a tax-rate increase on the April 5 ballot. The deadline for an April referendum is Jan. 25.