County Commissioner Austin Shaver looks to build schools
without raising taxes

Mary E. Hinds News Herald

Loudon County Commissioner Austin Shaver will present his plan to fund the county school building program without an increase in property taxes to the Loudon County School Board at the workshop scheduled for Thursday night at Greenback School.
 

Shaver presented the plan to the Loudon County Commission in direct opposition with a proposal by Commissioner Don Miller whose plan would raise the property tax rate by approximately 24.5 cents. 
 

Shaver said he has gotten a lot of positive feedback since his plan was unveiled. "The constituents I've heard from have been very positive in receiving it. They're excited that multiple ideas are being considered and that's ultimately what we are there to do to look at all the options and figure out what is best for the citizens," Shaver said. 
 

According to a handout prepared by Shaver, the goals of his plan are to build without raising taxes and to build without negatively impacting the reserves in the County General Fund.


Shaver's plan proposes to pay for the building program from Fund 156 the Rural Debt Service Fund and to take five pennies from the County General Fund and shift them to Fund 156 and to take another five pennies from Fund 141 the School General Fund and shift them to Fund 156 as well.
 

Shaver said he feels the last two property tax increases should be enough to get Phase I of the county school building plan underway.

"I think my plan is very feasible at this time. It is entirely unreasonable for us to ask the citizens to bear the burden of any further tax increases when the last two, including the 32 cent one in 04-05, was passed implicitly for education but they're not seeing anything as a result of those increases," he said. "It's time to put that to good work. That has given us the leeway and the finances to do this without another property tax increase," he said.
 

Lisa Russell, who represents Greenback on the county school board, said she thinks Shaver's plan is on the right track. She said she thinks shifting reserve funds makes more sense than raising taxes during these tough economic times.


"All you have to do is look at the audits, they support his contentions. The County General Fund increases by 2.5 million every year. They can tax the people for a building plan or take 1.3 million out of their 2.5 million (reserve increase) and fund the building plan. Then their net increase is 1.2 million. Their fund will still grow," she said. "Rather than tax the people I would think that would be the answer. What do you think the tax payers would prefer?" she asked.  


Shaver has also expressed concern regarding the $47 million price tag estimated for Phase I of the building plan. He said that price has been questioned by members of the school board, the county commission and by architects. He said he feels the building plan should be tailored to what the county can afford to fund.


"That is the overall idea of my plan, rather than taking the first number offered, rather than taking that on blind faith, going back and saying we can afford this much without a tax increase and asking the school board what can you do with this," Shaver explained. 

With the estimated $47 million price tag, Russell said she agrees that number is far from certain. "I do realize Austin's plan will not fund a $47 million building program, but it will fund, I think, between $32 and $35 million and that's a good chunk of money," she said. "Keep in mind that $47 million is just an estimate." Russell said it was entirely possible once the program is put out for bids, it could come in lower. Russell said she wants to find the most economical solution to give county students the best facilities the county can afford. "I do not want to have to choose between Greenback and Loudon, the kids in both those areas need schools and deserve to have what they need," Russell said. 


Shaver's handout details how the plan would work. According to his calculations, one penny is equal to $114,000 at a collection rate of 98 percent. Fund 156 currently receives 15 pennies annually or $1,710,000. 


By Shaver's calculations "moving five pennies from Fund 101 and Fund 141 will create 22.85 million per year in Fund 156 based only on property tax revenues and the shifting of pennies without accounting for other revenue streams contributing to Fund 156."


The handout concludes that "payments on the $12.5 million loan will leave $1.85 million per year (property tax only) to pay for the school which will require interest-only payments for the first two to three years."
 

Shaver's handout says the financial options to raise funds without a tax increase include $29 million for 30 years at five percent equaling $1,868,139.24 per year; $33 million for 30 years at four percent equaling $1,890,564.60; or $37 million for 30 years at three percent equaling $1,871,921.88 per year. Shaver acknowledges no plan is good if it doesn't have the necessary support.

"Hopefully, between the two entities (the school board and the county commission) we can work out a plan that meets everybody's needs without raising property taxes. The reality is that it doesn't matter unless we have six votes to support it on the commission," he said. 


Board member Gary Ubben thinks the board must consider the schools' operating budget first and said he fears Shaver's plan could decrease the amount of funds going towards school operations. "I think the primary issue right now for us is this coming year's operating budget. What Austin is proposing, I believe, will require a cut in the current pennies that are provided for the operating budget. I've looked at the preliminary information we have so far, I don't see how the district can operate next year with any less operating money than we have this year," Ubben said. He noted the system must deal with fixed costs and increases in the amount spent on energy and transportation. He also said many programs are required items by the state. "We also have a salary schedule for teachers that has automatic pay increases we must honor. To try to cut the budget does not seem reasonable to me at this point," he added. Ubben also expressed concern that Loudon County funds schools at only 85 percent of the state average and cutting operating expenses  now "doesn't seem reasonable to me." He said he wants to get operating costs covered before considering how to fund the building program. "At this point in time, we've got to make some decisions relative to that operating budget first and then see where we are, dollar-wise. Then at that point we can consider how we might fund the building program. If there is money available from other sources, wonderful. But, on the other hand, I suspect it is going to require some additional taxes in order to underwrite it," Ubben concluded. 


Shaver said he feels his plan will work because it allows the county to get the school improvements without raising property taxes again and without using reserve funds. He said the only impact would be the general fund would grow at a slower pace. "This doesn't require us to dip into reserves. It may mean we don't grow as much, but we can get new schools without raising property taxes. I think it's the best of both worlds," he said.

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4/2/09