Time to raise taxes or cut the budget? Decision looms as school board wrestles with funding options

ataylor@bradenton.comAugust 14, 2011 

MANATEE -- School board members are faced with a difficult decision.

The board has to decide whether to increase budget cuts beyond the $14 million already approved in July, or to increase taxes. Board members have scheduled a workshop Thursday to discuss the issues and look at Superintendent Tim McGonegal’s financial options.

“I requested that Dr. McGonegal provide the board with an option that doesn’t raise the overall millage rate,” school board Chairman Bob Gause said.

School board members Julie Aranibar and Karen Carpenter voted against increasing the total millage of 7.960. Aranibar believes Manatee County residents won’t support a tax increase.

“We cannot increase taxes at this time,” Aranibar said. “We still have funds for education and we can prioritize and downsize. This is no longer a temporary problem. This is going to be ongoing and we need to make the necessary reductions.”

Carpenter agrees.

“I have heard from many -- business people, elected officials, parents, citizens -- with a loud ‘no’ to any new taxes. Their opinion is that half of our taxes go to the school and the schools should manage it better, more carefully and wisely,” Carpenter said.

A tax breakdown

The portion of the taxes that includes the local required effort must be increased, according to McGonegal. He said that increase from 5.343 to 5.712 is required by state law. If that increase is not made, Manatee County would have to forfeit $61.8 million from the state.

If the proposed taxes are approved, a homeowner would pay at least $53.14 more for a house valued at $169,000.

Board members can only control parts of the millage that include the basic discretionary and capital outlay funds, McGonegal said. The basic discretionary millage is recommended to stay the same as last year at .748. The proposed rate for the capital outlay fund, however, has increased from 1.25 to 1.50.

Most board members say they are waiting to hear from McGonegal before making a final decision. Still, board Vice Chairman Harry Kinnan already has a question in mind for the Thursday workshop regarding the capital outlay fund increase:

“What would be the ramifications if we decided not to impose the 1.5 millage?” Kinnan asked.

Aranibar also questioned whether the capital outlay fund should stay at 1.25 -- providing somewhat of a break for those residents who spoke against the tax increase.

Barbara Harvey said she has heard from residents who are against the tax increase.

“I have heard from many Manatee County residents and most of them would not like to have a tax increase,” Harvey said. “I have heard from some who have reminded me that we will pay now or we will pay later. We should sacrifice now or suffer the negative effects of an uneducated citizenry later. Educating the future world leaders may cost the residents of our county, but our children are worth the best we can give them.”

Budget cuts

If taxes are not increased, district officials will have to go beyond $14 million in cuts, McGonegal said. He said additional cuts would likely have to come from the district’s $125.61 million capital fund budget.

“It would be extremely difficult to impact the general fund of any more cuts,” he said. “We are coming up with options in the capital area.” Over the last few years, McGonegal said the general fund has had to withstand $46 million in cuts. The $579.73 million proposed school budget will not be finalized until Sept. 8.

“If the board wishes to cut more of the budget, some capital projects may have to be delayed,” McGonegal said. “If the board chooses not to lower the budget, we could pay off long-term debt by selling some property -- making us stronger financially.”

The board recently held a workshop on selling property. Six sites valued at a total of more than $6 million were identified. But board members want to get an updated appraisal of the sites before going further on selling the property.

Aranibar, who served as chairwoman for the budget committee, offered other suggestions for financial cuts. She believes construction projects should be reduced by at least $10 million and consultant fees for health insurance should be decreased by $3 million to $5 million. An evaluation of top tier management should be completed to determine if as much as $18 million could be reduced from administrative staff salaries -- not including benefits, Aranibar said.

Those suggestions, Aranibar said, “would conservatively lower the budget to a point where pay cuts would not have been implemented.”

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