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Marshall school bond issue: Analysis: Lack of debt service levy makes bond issue tougher to achieve

Thursday, February 11, 2010

For want of a horse the rider was lost.

That line is part of an old saying that illustrates how small factors may have great consequences.

"For want of a debt service levy new schools were lost" doesn't roll off the tongue quite as easily, but it seems an apt description of the recent history of the Marshall school board's efforts to get permission to build new schools.

While the Marshall school board has heeded public opinion and made a number of adjustments to its plans to remedy problems with the district's elementary schools, one hurdle it cannot remove is the fact that it will have to raise taxes in order to address the physical problems of aging schools -- overcrowding, poorly functioning heat and air conditioning systems, damage from water seepage and more.

And for some critics of the school bond issues since 2000, that's a deal-breaker. Especially since the economy went sour late in 2008 and has yet to fully recover, critics point out that this is a bad time to hike taxes.

Superintendent Craig Noah acknowledges that the anti-tax-hike objection is one that is almost inevitable.

"There's probably never a time when everybody's going to say, 'Yeah, I've got extra money,'" for a tax hike, he said.

During a number of public meetings about the bond issue last fall and again in January, Wayne Crawford, chairman of Citizens for the School Bond, expressed frustration at the fact that bond issues have failed at the polls repeatedly since 2000.

"If you look around us, people are building new schools," Crawford said. "People are doing what's needed for the education system."

And he noted that the Marshall community has been generous in recent years, supporting a variety of building projects. Citizens helped raise money for a new cancer center and a community center/museum. Voters have approved sales tax measures to support the Saline County Justice Facility, the parks system, an enhanced 911 system and the county health department.

"Schools for kids? Can't get in the ballpark. Our community supports everything but the schools," he said.

There are certainly a number of reasons for each bond issue failure, but there is one common factor in each: Marshall is one of relatively few districts in the state that has no debt service levy in place.

During public meetings Noah said he believes it's been about a decade since the district had a debt service levy, which is a property tax collected specifically for the purpose of paying off debt incurred for capital expenses, like renovating buildings or constructing new ones.

With federal economic stimulus money available to help reduce the interest costs of school building bonds, 38 districts put bond issues on the ballot in November, including Marshall, according to a Missouri School Board Association report provided by Mike Parnell, MSBA director of education funding.

Of the 38 bond issues, 34 passed, most of them by sizeable margins.

After cross-referencing the MSBA list with a Missouri Department of Elementary and Secondary Education list of school district tax rates, it appears that of the 34 successful districts, only two did not have debt service levies in place prior to the election.

Of the four districts that did not succeed in getting voter approval for bond issues, three did not have debt service levies in place.

The statistics support a common sense assessment. If districts have to raise taxes to pay back bonds, issues will have a tougher time at the polls. If money can be borrowed without raising taxes, voters find it easier to give their blessing.

Noah explained that not having a debt service levy limits the district's ability to care properly for its facilities.

"Our levy is all operating, so the money we generate pays for teacher salaries, buys buses ... computers, etc.," he said.

Big-ticket capital expenditures have to be made, he said, with or without the ability to borrow money to pay for them, and the money comes out of the general fund or reserves. And some of those big projects are very big. Noah estimates repairs to Bueker Middle School's roof may exceed $300,000.

With a debt service levy in place, the district would have a better chance of getting voter approval for selling bonds to finance construction or renovation projects, he said.

"You're not going to pay more taxes, you're going to pay the same amount of taxes longer," he said. "Your tax bill won't change but you'll have to new building or renovate one. Usually once you get it, you keep it. Most (districts) have it."

For members of the community who see the school facility situation as desperate and getting worse, there is more at stake than one new school. Once a debt service levy is re-established, getting money to build future new schools and renovating existing facilities will still be tough, but not as tough.

Contact Eric Crump at marshalleditor@socket.net

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Another way is for our local representives to try and change the law. Why does property taxes have to be the only way. Mr Aull lived with this same thing when he was supt. We need our elected officials to look into this for us, but everyone seems to shy away from it, laws change every day why not this one. I will still vote Yes next time but there has to be a different way its getting to expensive for property owners to pick up the full tab all the time.


-- Posted by drop555 on Mon, Feb 15, 2010, at 5:40 PM

"Of the 38 bond issues, 34 passed, most of them by sizeable margins." Almost every community in the mid-Missouri area has a debt service levy because they all see the importance of supporting education. Voting yes in April is our chance to do the right thing for our kids but also Marshall.

-- Posted by d3 on Sat, Feb 13, 2010, at 2:11 PM

Unfortunately, property taxes are the only way schools can raise money. Sales taxes are hidden-people pay, but do not see it all at once. Balance fair with what is the right thing to do.

-- Posted by mu-grad on Fri, Feb 12, 2010, at 7:31 PM

Everyone keeps saying we don't care for the kids, because we don't pass these issues. They repeat that we gave for the cancer center, we gave for the 911, the parks, the justice center, well you are right in a way. But the cancer took no tax money, The rest of the projects were paid for with sales tax increases and the reason these pass so easily is that they are fair. Sales taxes get a little form everyone using facilities in Marshall no matter what it is or where they come from.

The bond issue only ask for one thing property taxes. Alot of people vote no because they can't take anymore increases. Others have no one in the school system, and do not feel its fair to keep paying for something they don't utilize. My property taxes have increased every year since I bought my home in 1990. Either the county, or state, or city, someone comes after a little more each year, then we just had the mistakes at the tax office last fall and everyones went up again to fix it. I say yes we need schools for our kids, I now have grand kids who need them and I am switching to a yes next time around but I am only one. My feelings toward the property taxes is the same, its not a fair system and that is what is hurting marshall. We cannot keep comparing this requesst to the others that use sales taxes. Sales Taxes are a fair tax that gets help from everyone, Property taxes are unfair because they go for the same folks everytime.

Thanks for letting me vent my opinion once more.

-- Posted by drop555 on Fri, Feb 12, 2010, at 1:34 PM

so are we going to vote on a debt levy or a school bond? i am in favor of it. he is right we came together to raise money for the cancer center and other community projects and now all the school wants is new schools. i see his point maybe a debt service levy would be part of the solution for now at least it would give the school district more money. i would vote yes on this.

-- Posted by retired military on Fri, Feb 12, 2010, at 6:19 AM
Response by Eric Crump/Editor:
The debt service levy and school bond are two parts of the same thing. The bond is sold to raise money to pay for the new building. The debt service levy is a property tax that is used to pay back the bond -- and that's the only thing it can be used for.

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