Jun 252014

By Naomi Hatch

It wasn’t an easy decision to make, bringing back the adjacent ways tax to those living in the Snowflake Unified School District, but the district governing board voted to do so last week.

Board members knew that they would have to make a big decision this year because last year they decided to eliminate the adjacent ways tax and use what money had been collected to redo the Snowflake High School parking lot. This year there is no money, but there are needs, especially to alleviate flooding concerns at the SHS track.

After discussion at the June 19 meeting, the board voted to bring back the tax, but designated that it will go toward work at the football field to alleviate the threat of a flood there. Carol Palmer opposed the tax.

Business Manager Mark Ollerton reviewed the proposed budget with the board and noted that the primary tax rate for 2014 is $4.9166 per $100 of assessed valuation, just up from the $4.8242 rate of the current year. The secondary tax rate is only for voter approved overrides and bonded indebtedness, and is $1.0556 per $100, up from 95.65 cents for the current year. The adjacent ways tax will go from zero per $100 to 13.16 cents if approved in the proposed budget.

District officials were able to maintain approximately the same tax rate until the state adopted some tax reform measures that said districts have to use all of their cash to reduce the tax rate.

Superintendent Hollis Merrell explained that the state chose to reduce corporate taxes for 18 to 19 years, following the theory that if such taxes were lowered it would encourage economic growth in the state. “It didn’t work, so now we have less tax revenues and didn’t bring more businesses in,” said Merrell. He noted that an economist said that if the state had the same tax rate as in the 1980s, it wouldn’t have budget problems.

“Ours is compounded by our local situation,” said Merrell.

“The state has gone through the economic crisis,” said Ollerton, noting that the value of the state has decreased and as that happened, it affected the school district. “It means to us the burden is shifted over to the local taxpayers to make up the difference in the budget.”

“People think if the tax rate is going up, we’re spending a lot more money,” said Merrell. “That’s not the case.”

Ollerton said that in the years he has been with the district, they have never used contingency funds, but said if they can’t replenish the savings account by next year, they will have only one year of contingency money to use.

Several things have led to the loss of funds for the district, including reduction of the assessed valuation in its boundaries by $12,767,947 from last year, due mostly to the closure of the Catalyst paper mill. Also adding to the loss is lower student count, in part due to families employed at Catalyst moving to take a job out of the community. Ollerton pointed out that the proposed maintenance and operations budget limit is established by the number of students in school, and the district count is down 63.409 from last year. “If someone moves out or moves on, it can really affect us,” he said.

“If the valuation of the county somewhat starts to stabilize, then we will see our tax rate start to stabilize,” said Ollerton.

The average teacher experience has dropped in comparison to the state, so the district is down about $102,000 to $104,000 going into next year.

On the positive side, the utility costs are down, in part due to a milder winter last year.

“This is a very difficult thing. Typically we come to the board with recommendations,” said Merrell, noting that they are in the same place they were last year regarding the adjacent ways tax, except last year they had money in that fund and knew they were going to do the SHS parking lot. He advised the board that the drainage problem could be very costly, and the Town of Snowflake needs to do some work, as well as the district.

“If we push things down the road hoping things get better, it will go higher in two years,” said board member Cory Johnson.

There was discussion on using the adjacent ways funds to repair the high school track and it was agreed that the longer they wait, the more damage there will be and the higher the cost of repairs.

In response to a question posed by Merrell, Monte Hancock of Hancock Leavitt Insurance said that the insurance company had paid the flooding claim and if they pay it again it could raise the insurance premiums. He did suggest that if the district had prepared and there was a plan, it would be a little more palatable to the insurance company to have that in place if there was another flood.

After discussing options, a motion passed to approve the 2014-15 proposed budget of $13,396,601, which includes $12,253,683 for maintenance and operations funding, and $1,142,918 for capital funding, and add the adjacent ways tax, in a 4-1 vote. Palmer cast the dissenting vote.