Brandon Twp.- Taxpayers in the Brandon School District saw a jump in their bills from 9.66 mills to 13 mills on July 1.
The increase was mandated by the state under Public Act 437 passed in 2012. The bill helps the state improve its bond rating and shortens the timeframe that districts have to repay loans, but even with the increase in tax revenue in this district, it will not be enough to make the $7,634,903 payment due next year. Because of the shortfall, the school board unanimously approved at their July 22 meeting a motion authorizing Jan Meek, executive director of business services, to borrow up to $660,000 from the School Bond Loan Fund next spring to cover the payment.
As of June 30, 2015, the district owes $46,604,767 to the state.
‘We are hoping our property tax revenue goes up so the number we have to borrow goes down,? said Meek.
‘In 2020-21, that is when we will collect more in tax revenue than what we owe. We will go into repayment mode instead of borrowing mode and that is when we will start paying down the debt.?
For the next five years, the district is just trying to keep up on payments and the roughly $2 million dollars that is accruing each year in interest. Meek acknowledges that the increase in property tax revenue is simply a projection, not a guarantee.
‘Obviously the housing market is something we have been concerned about through this whole process and how it will affect new families and us retaining families,? said Superintendent Matt Outlaw. ‘A vibrant school district helps a vibrant community and vice versa. We are partners. The Brandon School District was the very last district fighting this (change in law). A lot of districts are affected by this and we have done everything we could possibly do and came up short. We’re really disappointed.?
Public Act 437, passed in 2012 by the state legislature, mandates that schools pay off loans from the state within six years of paying off bonds. The district is currently making payments on two different voter-approved bonds, one from 1998, and the other from 2006. Because the housing market crashed shortly after the $73 million bond passed in 2006, the district has had to borrow about $4 million every year from the state up until this year to make the annual $8 million bond payment.
The state charges the district a 3.52280 percent interest rate.
District officials protested the change in law and pleaded to be exempt and ‘grandfathered in,? holding to their original repayment agreement with the state, all to no avail.
‘No one expected the decline and the market crash, so this (borrowing from the SBLF) is a fail safe and the state provides this avenue for the district to make that bond payment when we don’t collect enough in property taxes,? said Meek.
The district did get an increase in non-homestead property value last year from $97,691,165 to $134,420,500, mostly attributed to the replacement of the Enbridge Line 6B petroleum pipeline in the district.