On Sept. 22, approximately 36 people gathered at the Box Butte County Courthouse to take part in a joint hearing on a proposed tax increase by Alliance Public Schools and Hemingford Public Schools.
The hearing was the result of LB 644, which requires local governments to mail postcards to tax payers when their budget increases more than two percent. County Clerk Judy Messersmith began the hearing, noting that the only local entities required to be at the hearing were Alliance Public Schools and Hemingford Public Schools.
Dr. Troy Unzicker, Superintendent of Alliance Public Schools, spoke at the hearing first, explaining the district already hosts budget hearings.
“The hearing on the tax rates are nothing new,” said Unzicker. “We do one every single year. What is new about this is the state legislature put LB 644 through and they set a minimal percent, two percent, of a budget to have this hearing instead of our normal hearing.”
Unzicker said he would still conduct a budget hearing at a special meeting on Sept. 27, where the Alliance School Board will approve their budget. He said he believes that property taxes are out of control, but that the school does not control how education is funded.
“We live with the parameters the state sets on us, just as the county does,” said Unzicker. “The valuations went up 4.15 percent this year, but they have to follow state statute when they do that. That’s what caused the increase.”
Unzicker said he fielded several calls since the postcards were mailed, explaining that in some cases, taxes actually went down.
“This is my 10th year in Alliance, we’ve never raised that (asking) rate,” Unzicker said. “We’re actually a fraction of a cent down for next year, so if your valuation did not increase, your property tax will actually go down. Personally, I’ve heard, ‘You don’t care, it doesn’t affect you.’ My property tax went up nine percent, so mine did go up nine percent. The school as a whole is going to come out about 4.115 percent, so we did have a slight raise.”
Unzicker explained that with all of the funding that is involved, the budget for Alliance Public Schools will go up 7.4 percent, though the way the funds are set up, the increase is deceiving. He said the way some funds work, the school must spend money up front and wait for reimbursement through those funds, though the reimbursements can be slow in coming back to the schools.
Increases in teacher salaries alone, Unzicker explained, are expected to cost the school $350,000. He explained that those increases are required by the state to keep teachers comparable to other school districts.
“If we do not do that, the teacher just refuse to take the lower rate,” said Unzicker. “We go to CIR, we lose, we increase the rate. State rules, not ours. I don’t see any way a school system can stay under the two percent every year.”
An issue on the ballot in November could have an impact on the school’s budget if it is passed, Unzicker explained. During the general election, voters will decide whether to increase minimum wage in the state to $15 per hour.
“We have 120-25 classified staff members,” said Unzicker. “How are we going to keep under two percent when we’re forced to raise our starting rates that far? So, there’s a lot of factors in this.”
Unzicker noted that in 2009 the district received $6.1 million in state aid, and only $2.3 million last year, a loss of $3.8 million, which is made up through property taxes.
“I believe, along with many of the politicians, as well, that the state aid finance formula is broken,” Unzicker said. “We are much too reliant on property taxes. You can see the increases that have happened. You don’t have to tell me that. I know that, I agree with you. The problem, and the reason it doesn’t get fixed, is as a politician, you don’t get elected when you stand in front of people like you and say, ‘Property taxes is out of control, I’m going to fix it by raising income tax, or sales tax.’ Probably what they have to do to fix the property tax reliance.
“You don’t win elections that way,” said Unzicker. “You win elections and you stay in office by blaming somebody else like the local government that has their hands tied every step of the way on how we finance schools.”
To dispel rumors, Unzicker emphasized the district has not exceeded any budget limit, noting that the state would refuse to approve their budget if they had. He said they are following the guidelines set by the state. He said that when he came to the district in 2013, the district had $14.6 million of bond indebtedness, a $2.5 million general fund debt, and a $1 million line of credit that was borrowed on the first day of the budget to help the district get through month to month expenses, and no reserve. Since then, the district has eliminated the line of credit, are carrying a reserve and terminated the $2.5 million general fund debt. He also said the $14.6 million bond indebtedness is down to $9.5 million, which was accomplished by refinancing, which has saved the district in interest. Unzicker said his goal for the district is to eliminate the debt by 2025, which will help reduce the district’s tax request.
“Our passion is to get that debt removed,” said Unzicker. “So, by continuing taxing at the rate we’re taxing, we’re going to actually save you money down the road and get that debt gone sooner so we can lower a tax.”
After discussion regarding improvements to facilities at Alliance Public Schools and state funding, Dr. Travis Miller, Superintendent of Hemingford Public Schools spoke to those gathered about the proposed increase.
“In Hemingford, we have a proposed increase of 5.09 percent,” said Miller. “The dollar amount of proposed taxes for the Hemingford Public Schools is $6,408,602. The property tax request last year was $6,098,106. The total assessed value of property differs from last year’s assessed value by four percent. The tax rate last year was 0.925220 per $100 of assessed value. So, the tax rate, which would levy the same amount of property tax as last year, when multiplied by the new assessed value of property, would be 0.890631 per $100 of assessed valuation.
“The Hemingford Public Schools proposes to adopt a tax request that will cause its tax rate to be 0.935979, so going up a little over a penny on the levy,” Miller said.
Miller explained Hemingford Public Schools is affected by many of the same constraints and issues as Alliance Public Schools, which also contributed to the increase.
“We are not immune to the same pressures economically that private employers face and that you all face,” said Miller.
Miller explained that Hemingford Public Schools is scheduled to receive a little over $700,000 in state aid, noting that the number has been decreasing over the years. He said the property tax request is barely enough to cover payroll for the district, with the state aid being used to cover other expenditures. He explained that they are also experiencing a delay for reimbursement of funds from the district.
Several people asked questions to both Unzicker and Miller regarding school funding and where all of the state aid that the districts once received is going. Before the hearing drew to a close, Messersmith encouraged people to attend budget hearings for their local government to help provide input as elected officials decide on their budgets.