New Richmond School District Calculator Full of Wishful Thinking Buttons
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Somebody help me here because I can’t quite figure out who is trying to fool who with this scheme. New Richmond is trying to figure out a way to get $93 million out of the local property tax base to pay for a large amount of new school infrastructure, but the numbers don’t even come close to adding up.
In this week’s New Richmond News, their on-line story stated:
Tax impact
School officials are working hard to minimize the impact the referendum will have on taxpayers.
The district’s 2005 referendum attempt was estimated to cost property taxpayers $2.55 per thousand of valuation. That proposal was for $54 million in buildings and renovations.
Today, with a proposed $93 million plan, district taxpayers will actually see less of a tax impact initially.
If the referendum is approved, according to Veilleux, the district will not place the total debt on the tax rolls immediately.
“We’re only going to borrow the money as we need it,” he explained.
As a result, a property owner with a home valued at $100,000 will see just a $75 tax hike in the first year. Under the current proposal, taxes on that home would rise by no more than $75 in each of the next two years as well (to a total impact of $150 in the second year and $225 in the third).
By the fourth year of the project, taxes on the $100,000 home would increase by an additional $25, placing the final, annual tax impact at $250 for that home. That’s less than the $255 projected for the 2005 proposal.
The taxing plan will save area homeowners hundreds of dollars over the next four years, Veilleux said, making the package more palatable for many.
Veilleux said the overall tax impact would even decrease as more homes and commercial buildings are added to the district’s tax base.
Ya gotta love that line from someone who is paid off the backs of local citizens, “The taxing plan will save area homeowners hundreds of dollars over the next four years making the package more palatable for many.” Was it just a Freudian slip? Or is it he doesn’t care if it’s palatable for everyone?
The part I really question is his numbers. How can it be that in just two years the cost of now repaying a $93 million loan is less than repaying a $54 million loan attempted back in 2005? This doesn’t make sense.
The first thing to take notice of is the supposedly $250 increase on a $100,000 home being the final impact. Given that the average home in St. Croix County is over $200,000, why isn’t the superintendent telling the public to look more towards at least a $500 increase in property taxes?
However, there is another way to look at the impact a $93 million loan would have on local tax bills just by looking at the total number of tax returns filed in a district as supplied by the Wisconsin Dept. of Revenue. (This is the type of information your paper either isn’t smart enough or hasn’t the guts to print.)
For the year 2005, here are the numbers just release by the Wis DOR for the New Richmond school district.
| Total District Income | Returns Filed | Taxable District Income | Returns Filed |
| $338,091,855 | 7,094 | $293,229,804 | 5,956 |
Now, no matter what way you want to slice it, a $93 million 20 year bond is going to require a $7.7 million yearly repayment check. Take and average that amount over each income tax return filed and you can start to see the average each household will be expected to pay. Please keep in mind that the number of filers is a combination of those filing single and jointly, so the 5,956 number is probably closer to the average than is the 7,094.
Taking the $7.7 million and dividing it by the 7,094 returns filed leaves…
$7,700,000 / 7,094 = $1,085 per yr.
or
$7,700,000 / 5,956 = $1,292 per yr.
Either way, it’ll be fascinating to see if the citizens of New Richmond will be gullible enough to swallow this sales pitch. And part of me hopes their referendum passes just to see if they can prove my numbers wrong.
In the mean time, I’d suggest they get the superintendent a new calculator – one that has fewer buttons with bigger lettering on them.
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Even S., you’re right on the cost of borrowing $93 million. You came up with $7.7 million yearly payment and I calculated it at $7.2 million based on 20 years at 5.0% and two payments per year.
The bond guy broke it down into four years of increased borrowing. If the referendum passes, design will start immediately on new elementary and high schools. So over four years borrowing increases at the rate of 0.75 mils/yr. for the first three years and 0.25 for the fourth year. Total increase would be 2.50 mils. Their power point presentation shows the taxes on houses costing $100,000; $200,000; $300,000; $400,000; and $500,000.
Should the referendum pass, NRSD will have the highest mil rate of all of the following districts: Somerset, Durand, Glenwood City, St. Croix Central, Amery, Osceola, Prescott, Ellsworth, and Hudson. As of 2006, Hudson’s mil rate is 7.15 and New Richmond’s is 7.69 rising to 9.69 after an April 3rd pass.
What grinds me is the “savings” by eliminating the football field. So if I tell my wife I want a Corvette for $60,000 and she wants a used Toyota for $20,000, did we save $40,000? Can I take it to the bank?
Another number you might want to play with is the education cost per student. New Richmond is $8272/student and St Mary’s Catholic School (PK-8) in New Richmond is $5402. Add on top of that the property tax for the parents of the 174 students in the parochial school and you could say the parochial education is higher by that amount of taxes. Oh well, that’s another issue.