Reasons to vote NO on the Fife SD's bond measure on the November 2023 ballot
This example property chart assumes little to no new construction. This is the conservative case. Taxing districts should be conservative with other people's money. See the interactive calculator (link below) to run cases with different annual proportional obligation factor changes to better model new construction effects - the less conservative cases.
As a result of the McCleary Decision, local property taxpayers are paying for dramatically increased State School 1 and State School 2 property tax categories. Property taxpayers are also paying for inflation fueling local school district Enrichment Levies (which mostly go to faster than inflation rising district salaries). These Enrichment Levies should be eliminated – especially since we had the McCleary Decision and the State is fully funding basic education.
So if these Enrichment Levies were eliminated, as citizens were told they would be, then property taxpayers might be able to afford these capital projects. If/when there is any actual new construction, districts should be appropriately collecting "impact" fees from developers. Existing property owners should not have to subsidize construction companies' profits if they build new apartments or houses. The other commonly used method to pay for capital projects that other school districts employ are better planned and timed, taxpayer considerate, sequential, interest-free, 6-year capital levies.
Per pupil expenditures (PPE) including capital outlays and interest on debt, student academic performance comparisons with districts with similar demographics, and median total compensations (including cash, pension funding, and benefits) for staff can be found at the following link:
An analysis of the district’s cost analysis
See the image with the red border. This snapshot is from the district's public website.
There are several problems with the district’s cost analysis.
The stated estimated tax rate is $0.67. But where do they get that rate from?
It appears that they illogically take the difference of the total estimated tax rates for years 2023 and 2024. See Fig 1 which has an annotation of the district’s bond management company’s bond projection datasheet. That 67 cent rate is not in anyway a value for this one new bond.
The district should have calculated an estimated rate for just this one new bond. See Figure 2 that the author created. It clearly shows that the estimated rate for the new bond will start out at $1.27 for the first year and rise to $1.61 for most of the middle years of the bond and then rise to $2.89 and higher for the last 3 years.
Now assuming that there is little new construction (a conservative estimate and since the Fed is raising interest rates), the average annual tax for this one bond for the example home ($300,000 AV as of 2023) will be $777 per year for 20 years.
Even if we assume rapid new construction continues for the next 20 years on the order of 3% compounded a year as Total AV growth, the example home will be obligated for $538 per year for 20 years.
The district’s estimate of $300,000 X $0.67 / $1000 = $201 per year ($16.75 per month) is woefully too low.
The district should have used basic accounting fundamentals in their cost analysis for the benefit of voters/taxpayers. This is why the author recommends a TILA (Truth In Lending Act) type law to give voters transparent, logical, accurate cost impact estimates for all tax measures. A private citizen shouldn’t have to do this task.
Figure 3 shows the district’s existing debt’s repayment schedule. The reader will notice the large payment in 2023 and the subsequent lower value in 2024. This adds to the confusion of obtaining a clear picture of the cost of this new bond.
Please see the link for the logical interactive cost impact estimating calculator for a meaningful estimate of future property tax impacts by this one 20 year bond using the accurate proportional obligation factor (POF) method.
Figure 1
The district's bond management company's bond/levy projection datasheet with the likely source annotated for the $0.67 bond tax rate
Figure 2
The author's summary of the key data from the district's bond/levy projection datasheet
Figure 3
The district's existing debt's repayment schedule
An analysis of the King County's Tax Transparency Tool (TTT)
Bond/Levy Projection Datasheet Provided By The District
