Tax impact of school bond debated

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How much will the $160 million school bond slated for the November ballot cost voters if approved?

The estimated tax impact of the bond was the main topic of discussion during an Aug. 11 public hearing, held during a meeting of the New Hanover County Commissioners.

Bruce Shell, Republican candidate for New Hanover County Board of Education and former county manager, was the only individual signed up to speak during the public hearing. Shell called for voters to make informed decisions at the polls in November, suggesting it is the board’s responsibility to provide necessary information about the bond to the public.

“I think it’s imperative that the citizens understand the bond issue and what its cost is to the county, what its impacts are to the county. The citizens look to the elected officials for that leadership,” he said.

Shell provided a more modest estimate of the bond’s highest impact to the county tax rate than numbers calculated by county staff at 2 cents instead of 4 cents per $100 of property value.

The current county tax rate is 55.4 cents per $100.

During a July 21 meeting, county finance director Lisa Wurtzbacher reported to the board that the average tax impact of the bond over its 20-year life is 3 cents, if approved. She said the tax impact would be higher at the beginning of the debt’s life, requiring a 4 cent increase in the 2015-16 fiscal year.

During a May presentation of the 2014-15 budget, county manager Chris Coudriet said the county would see a 5 cent increase in the 2015-16 fiscal year to meet debt obligations from voter-approved bonds in 2006 and 2008.

“No one’s going to vote, in my opinion, for a 9 cent tax increase if they think that’s what’s going to happen,” Shell said.

Coudriet warned of conflating the two tax increases predicted for the 2015-16 fiscal year, arguing the 5 cent raise is needed to pay for existing debt obligations whether or not voters approve the school bond in November.

“That 5 cents has nothing to do with the future as it relates to a $160 million bond,” Coudriet said.

Chairman Woody White agreed with Shell about the need to educate voters and shared a few facts motivating his decision to not support the bond.

White said citizens will see property taxes raise under all estimates. He compared the tax burden of county residents in 1994 to 2014, which has increased despite growth in the population and assessed value of the county tax base.

Facing mounting county debt, White questioned the sustainability of assuming more debt to fund growth and improvements.

“We cannot dispute the facts that over 20 years, two decades, there’s been a migration in this county, and every other county and every other state across the country, of funding public services through the debt market,” White said. “It’s not a trend we can sustain.”

Commissioner Jonathan Barfield Jr. responded to White, suggesting citizens who support continued growth of the community understand it comes at a cost.

“The citizens, they’re demanding certain things in their community. … They want these things and they understand, I believe, that if you want something, it’s going to come with a price tag,” Barfield said.

The board voted 3-1, with White dissenting, to adopt the bond order, directing the clerk to the board to file a sworn statement of county debt, available for public inspection, and establishing the board’s authority to levy a tax to pay the principal and interest on the bond if approved.

County staff estimates the bond will accrue an additional $68 million in interest over its expected life.

The $160 million bond will fund security, technology and infrastructure improvements to all schools in addition to a $7 million project to renovate and expand Wrightsville Beach School, construction of a new 595-seat elementary school in the northeastern part of the county, and demolition and reconstruction of College Park and Blair Elementary Schools.

In other business, commissioners granted Coudriet authority to oversee the daily operations of the clerk to the board and two deputy clerks.

The change in supervision follows the abrupt resignation of former clerk Sheila Schult July 21. Schult stepped down after more than 10 years of service after learning a majority of commissioners questioned her service to the board during a meeting with Coudriet.

State law dictates the clerk serves at the pleasure of the board. Coudriet said the clerk will still serve at the pleasure of the board, but his office will now provide additional support.

Commissioners tapped deputy clerk Teresa Elmore to serve as interim clerk during an Aug. 7 agenda review. The board will hire a permanent replacement after the November election.

email miriah@luminanews.com

 

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