OPINION: Time to rebalance Jefferson city-school taxing equity
There has always been something of a unique and close relationship in Jefferson between its city government and its city school system. At one time, it was virtually impossible to distinguish between the two as the same small group of people ran both. On paper there may have been a distinction, but in reality both governments operated as one thing.
That wasn’t always good. The lack of autonomy in that relationship distorted community priorities at times and the concentration of power didn’t leave much room for any outside debate.
Today, the political relationship is a little more arms-length, but has become distorted in a different sense, one that needs correcting.
Historically, about 75 percent of the City of Jefferson’s decisions were based on doing things that were good for the city school system as its main priority. The city ran water and sewer and annexed property at I-85 not just for creating jobs, but mainly as a way to expand the city’s tax base to support its independent school system. Pressure in the 1970s and 1980s to merge the county’s three school systems was a powerful force that pushed the city to take those actions to prevent any kind of school system merger.
Because of the close relationship between the school system and city hall, officials were also always very aware of how their tax rates affected each other. City officials were always very, very sensitive to not have a high millage rate that would undermine the school’s ability to have enough taxes for its needs.
But all of that seems to have changed and now there is an imbalance between the two.
The Jefferson City School System has taken a big hit in its revenues because of both state cuts and the local recession. Programs have been eliminated in the schools, people laid off, furlough days put in place. The depth of the cuts is born out in a story last week about the very low per student spending the system has compared to other schools in the area and the state. Even before the recession, the city school system was operating on a thin shoestring budget compared to most other school systems.
Despite that, the school system has resisted raising its tax rate. One reason for that today is that Jefferson City Hall is being over-funded. Even as the city school system scratches and skimps and makes cuts, other City of Jefferson employees are getting a pay raise this year. The city continues to buy new police vehicles and expand other programs. It’s as if nobody told Jefferson City Hall a recession was taking place.
The reason city hall has the money to give raises even as the school system makes cuts is that the city’s millage rate is too high. At 6.4 mills, the city government is taking in too much money from property taxes. The school mill rate is around 14.5 mills.
What should happen is that the Jefferson government should cut its tax rate by 1.5 mills and the school system should raise its tax rate by that amount. Taxpayers wouldn’t be paying any more in total than they are now, but the balance of city needs would be much more equitable.
Jefferson city hall officials would not doubt protest this move and they surely feel they deserve a raise and all the other goodies and perks they enjoy.
But the truth is, the only reason city hall has such a flush of cash today is because of the city school system. It was the school system’s reputation in the boom years that lured a lot of the higher-end residential development to the area, development that grew the city’s tax base. Jefferson city hall isn’t flush with money because of it own actions; it’s because the school system lured the tax base the city now exploits.
It’s time to rebalance the financial dynamics in Jefferson. The city school system is one of the top in the state (and was recognized last week for that by the Governor’s Office of Student Achievement.) It’s the city’s strongest asset, both in the short term and in the long term. It has proven over a long period of time that it squeezes more from a dollar than any other school system in the area. It’s made cuts and sacrifices far more than any other area school system.
For that system to scrounge now when the city itself splurges with pay raises just isn’t right.
It’s time for city hall to make cuts, lower its millage rate and for the school system to raise its tax rate. Fairness dictates that a rebalance needs to happen.
Mike Buffington is editor of The Jackson Herald. He can be reached at mike@mainstreetnews.com.
Today, the political relationship is a little more arms-length, but has become distorted in a different sense, one that needs correcting.
Historically, about 75 percent of the City of Jefferson’s decisions were based on doing things that were good for the city school system as its main priority. The city ran water and sewer and annexed property at I-85 not just for creating jobs, but mainly as a way to expand the city’s tax base to support its independent school system. Pressure in the 1970s and 1980s to merge the county’s three school systems was a powerful force that pushed the city to take those actions to prevent any kind of school system merger.
Because of the close relationship between the school system and city hall, officials were also always very aware of how their tax rates affected each other. City officials were always very, very sensitive to not have a high millage rate that would undermine the school’s ability to have enough taxes for its needs.
But all of that seems to have changed and now there is an imbalance between the two.
The Jefferson City School System has taken a big hit in its revenues because of both state cuts and the local recession. Programs have been eliminated in the schools, people laid off, furlough days put in place. The depth of the cuts is born out in a story last week about the very low per student spending the system has compared to other schools in the area and the state. Even before the recession, the city school system was operating on a thin shoestring budget compared to most other school systems.
Despite that, the school system has resisted raising its tax rate. One reason for that today is that Jefferson City Hall is being over-funded. Even as the city school system scratches and skimps and makes cuts, other City of Jefferson employees are getting a pay raise this year. The city continues to buy new police vehicles and expand other programs. It’s as if nobody told Jefferson City Hall a recession was taking place.
The reason city hall has the money to give raises even as the school system makes cuts is that the city’s millage rate is too high. At 6.4 mills, the city government is taking in too much money from property taxes. The school mill rate is around 14.5 mills.
What should happen is that the Jefferson government should cut its tax rate by 1.5 mills and the school system should raise its tax rate by that amount. Taxpayers wouldn’t be paying any more in total than they are now, but the balance of city needs would be much more equitable.
Jefferson city hall officials would not doubt protest this move and they surely feel they deserve a raise and all the other goodies and perks they enjoy.
But the truth is, the only reason city hall has such a flush of cash today is because of the city school system. It was the school system’s reputation in the boom years that lured a lot of the higher-end residential development to the area, development that grew the city’s tax base. Jefferson city hall isn’t flush with money because of it own actions; it’s because the school system lured the tax base the city now exploits.
It’s time to rebalance the financial dynamics in Jefferson. The city school system is one of the top in the state (and was recognized last week for that by the Governor’s Office of Student Achievement.) It’s the city’s strongest asset, both in the short term and in the long term. It has proven over a long period of time that it squeezes more from a dollar than any other school system in the area. It’s made cuts and sacrifices far more than any other area school system.
For that system to scrounge now when the city itself splurges with pay raises just isn’t right.
It’s time for city hall to make cuts, lower its millage rate and for the school system to raise its tax rate. Fairness dictates that a rebalance needs to happen.
Mike Buffington is editor of The Jackson Herald. He can be reached at mike@mainstreetnews.com.
Recap of some of the stories in the last 12 months by Mainstreet News (all paraphrased and summarized):
SCHOOL:
- "Educator Pay Out of Control": Wasn't this a black cloud for months?
- "City to spend a half million dollars on athletic facility improvements": Didn't this include a $300,000 resurfacing job on the JHS track?
CITY:
- "City finishes in the black": Didn't this highlight the fact that no city employee has seen a raise since 2007?
- "Jefferson finances in order": Wasn't there a lot of credit thrown the city's way for PROPERLY handling the money they are responsible for managing?
Now, let's fast forward to a slow news week, where no public figures have a fresh scandal, no businesses have been recently caught in illegal activity and everyone SEEMS to be getting along...
So, out comes an article about how the school system is "scratching and skimping" and the city has "perks and goodies"?
That's curiously surprising. Especially from such a respected journalist (no sarcasm, Mike is intelligent).
Are all of the following not facts?
- The new police vehicles are either a. Tahoes purchased through seized drug money or b. patrol cars leased through a contract designed to save the city taxpayers money.
- These "other programs" would have been explained, especially in an article such as this. What are they, Mr. Buffington?
- The City's mill is 6.4. The school system's is 14.5... So in a time when the City has frugally managed their funds they should take a mill rate that is already more than HALF of the BOE's and cut it so that it's looking at a 4.9 mill rate while the school system goes to 16.0?
Mr. Buffington, could we please see a comprehensive study of similar municipalities and BOEs where the mill rates are so far apart?
- Any decrease in funding that the BOE has realized has been at the State level. Is it possible that the BOE had too many eggs in the State tax basket and not enough eggs in the local tax basket?
- Call me crazy but wouldn't the city property tax collections be as adversely affected as the BOE property tax collections?
- The City is able to properly offset the decrease in residential property taxes by the increase in commercial property taxes on the tracts at 85. If you would like to understand this concept ask your local councilperson about the 20/40/60/80/100 plan. I'm sure that he or she could explain it adequately. As a taxpayer, you might be as delighted as I was to find out how it works and to know that this economy could hang around another 2-3 years and our city would not have to cut services in any way... which is great if you happen to need police, fire, water/sewer, parks/recreation or would like to rent the civic center or visit the library.
At the end of the day, I guess I'm just surprised that Mike would spend as much time as he did to write an opinion about two local branches of government that are doing as good of a job as they are.
The Jefferson School System is well-ran, relatively frugal, remarkably consistent and a model for all other local systems.
The Jefferson City Government is very efficient, incredibly transparent (unlike the old days), even-handed and scoffs at waste (from what I have seen).
If decreasing the City rate and increasing the BOE rate is the way to go, and I'm not sure it is, then fine. But wouldn't the person who's highlighted so many of the education system's shortcomings push for their correction before he would push for "more money"?
The issue here is the balance between the two governments. City employees get raises; city school teachers have 1/2 box of copy paper for the rest of the year. Yes, much of the school funding is state-based; but that's the point. The city school system has very little access to diversify its income, only local property taxes, while the general city government has sales taxes, revenue from permits, utility sales, etc.
The city school system is the goose that laid the golden egg which makes the city government run. In the balance of fairness, the city needs to depend more on its other sources of income and back off its millage rate to allow the school system to maintain some level of service during this economy. The school has no where else to turn for money and while it can raise its milage rate in any case, to do so on top of the current city millage rate would be a burden for taxpayers.
You are correct that I am critical of how the education system works in general, much mandated by the state. But in all fairness, the city system is proven to be good financial managers. I'm not sure it's really fair for city employees to get raises while the school system suffers.
Balance is all I'm saying.
In 2007 the City was over $1M in the red. Ward was selected as City Manager and within 11 months had the city back in the black. Now the City is in the best financial condition in recent memory. The City of Jefferson is one of the few municipalities in the state that has not had to furlough or lay people off and they still have managed to bring in millions in state and federal money. Your previous articles that highlighted city salaries clearly show that Jefferson employees are at the low end of the local salary range. The highest paid person in the City, Ward, is the lowest paid manager in the County and Jefferson is the largest City and the County seat. He may be the lowest paid but you could not tell that from his actions. Ward is at every event, I often see him working or at events on the weekends, and he gets the job done! The salary increase that was approved was approved in a 5-0 vote by the City Council and the salary increase is the first in 3 years for city employees. Due to the improvements that I have seen since 2007, I say that we are lucky to have such a efficient team working for the City.
P.S. As Editor, you may want to check your opinion piece for grammatical and spelling errors before you go to print next time.
And I'll ask this additional question, why are property taxes calculated to support these, but a user type fee not used. A family of 5 pays relativly the same amount as a family with no children, and illegals receive education while paying little or no property tax! Why can't the counties vote on a sales tax and per child user fee dedicated totally for school expenditures. This would greatly even out the responsibility across the board!!
But, is balance moving the scales to a 3:1 margin?
I would like to probe a couple of your most recent statements:
"City employees get raises; city teachers have 1/2 box of copy paper for the rest of the year."
That is a very true statement, yet very misleading at the same time.
Do YEARS of raises and a salary scale built largely around a teacher's education (which by even an educator's admission is broken) mean that city employees who work just as hard shouldn't receive a cost of living raise- regardless of when it is? I don't know the answer to this. I just feel like it's worth asking.
I almost feel like it's just a touch of socialism. Not the scary kind. Just the kind that resides in our thoughts subconsciously.
After all, and correct me if I'm wrong, the largest portion of a teacher's salary is funded by the State- then the City or County "supplement" is added in?
If this is the case, wouldn't it make most sense when the State funding begins to dry to hit the teacher's salary FIRST instead of reducing the money for copy paper or classroom supplies? If times get really lean, eliminate the local supplement and move it to supplies.
"The city school system has very little access to diversify its income, only local property taxes..."
Does the Jefferson BOE not receive a sizable portion of the SPLOST funds generated in Jackson County? I may be mistaken but I have always assumed they have (this is how all of the athletic facility upgrades were funded, correct?)
How many "arms" does the average school system have? I realize that they're not all created equal but PTO's, booster clubs, they take burdens of different sizes off of a BOE. Not huge but some- probably equal to "permits".
How close are we to the E-SPLOST to becoming a reality? I'm unsure so I really am asking the question here. I know you posted the poll a few weeks back but where does it currently stand?
It is to my current understanding that the Jefferson BOE is building a new wing at JES using interest free loans from the government. Having said that, how much money is available through federal grants? Even it's matching, it's better than paying 100%.
I believe this to be one of the biggest ways that City Manager Ward has positioned the City to be where they are- leveraging already budgeted funds and employee labor to gain valuable federal funds for much needed projects. The most recent example is the waster water treatment plant that was being talked about. The most visible example is renovations downtown. Combined that's $1.5 million.
Obviously, the BOE can't issue permits and can't sell utilities but I bet they could work with the City to build in an "impact fee".
Would it not be feasible to levy $1,500 fees on any new construction within the City?
I agree that the BOE shouldn't view Option A as raising the millage rate but in an economy that probably won't rebound until the Spring of 2013 perhaps it's time to FIND a way to diversify their investments rather than lobbying for another body's funding?
Dr. Jackson is one of the 10 smartest people I know. Even if he doesn't have the answer, I feel that he could assemble a team that would be able to discover an avenue that is feasible, sustainable and, best of all, fair and balanced.
DISCLAIMER: My wife is an educator, has been furloughed and receives a smaller paycheck than she did 2 years ago. I understand the strain on education the economy is causing.
Should teacher salaries be hit first and maintain supplies? How about administrators first. It's a crime to hear a school administrator who makes over $100,000 per year say that PTA and parents should donate paper to the school system. That's a damn shame.
As far as I know, school system can't levy impact fees on new buildings. The truth is, school systems don't have the means to generate new income sources, city governments do.
As for city raises, well a lot of private businesses and other governments haven't been doing raises in several years either. Why is Jefferson the exception? Why do they deserve a raise when the school system is needing funds and nobody else is giving raises in the area?
I would contend that the city millage rate is too high and that has given them the ability to do that, not that it is somehow inherently deserved.
In light of the school system's struggles, it seems a shame that they get a reward... kinda like treating two children differently when they should be treated the same.
Everyone wants a raise. Nobody argues that. The issue is revenues and what is fair in how the city's millage is divided between school and city. I think it's gotten off balance and needs to be fixed.
The school system's has had raises throughout the years, while the PD has not. The PD employees are still not at the level of the pay the school is at and never will be.
You say that the children should be treated the same by the city, I agree, so why does a school administrator make $100,000 and a Chief of Police make $50,000. Are these two positions not equal?? Further, a school teacher makes what two police officers combined make. Lets put all the updated wages in the newspaper and not just public safety.
I feel both postions are very important for the city of Jefferson and should be more equal. But you have to compare all the circumstances. When you have companies developing in town that start off making $16.50 per hour, then its hard to keep teachers and police officers. Jefferson has to compete to obtain professional people in the work force and pay their employees.
Georgia Salary InformationTeacherPortal Salary Rank: 3rd
Starting Salary: $34,442
Average Salary: $48,300
Salary Raise Last Year: 3.8%
Salary Raise Last 10 Years: 42.1%
http://teacherportal.com/district/georgia/jackson-county
Salary Data for Police in Georgia as of January 2011
25th percentile Median 75th percentile
$28,000.00 $33,280.00 $39,000.00
http://www.ihirelawenforcement.com/t-Police-s-Georgia-salary.html
In case the public does not know the pay of Jefferson Police Officers, the starting salary is between the lowest of 25th percentile and the median. Even with a 3% raise, it still does not put the officers at the median level.
1. None of these jobs would exist without teachers or some level of education.
2. Just because a piece of paper says that a teacher makes $40,000 + a year doesn't mean that is what they take home. (After taxes, insurance, retirement, etc. it is more like $25,000.) Additionally, many teachers have student loans that they must pay back. This is the cost of higher education. If they choose to go further with their education, they have to pay for it out of their own pocket. Most teachers don't make enough to pay for it themselves, so they end up getting more student loans. (Some get grants and scholarships if their lucky.)
3. Most people think that teachers only work the 190 days (well, less than that now) that are on the school calendar. This just isn't true. Most teachers that I know work year round and it is usually more than 40 hours per week.
4. People are always going to wish that they earned more money. If you can't reconcile your salary with your job satisfaction, then maybe it is time to get a new job.
FIRST, I will say that when I stated a "teacher's" salary should be hit before the operating budget, I meant "educator"... and, specifically, upper administration with masters, specialists and doctorates.
I think it's fair to point out that Dr. Adams- not Jackson- was the one who stated that copy paper should be donated. Yes, that is nearly criminal from a man who makes north of $130,000 annually.
Combine that with the several employees who make more than $100,000 annually (including insurance), and the DOZENS of employees making greater than $80,000 (including insurance) and you've now counted more than 25 Jefferson educators making more than the highest City employee.
Wouldn't the fact that more than three times as many Jefferson educators make $90,000-$100,000 as their are City employees that make $45,000-$50,000? (I believe that to be accurate based on the published charts in the print edition of the paper)
I think, in order to properly repair the entire education system, the salary scale could go under major reconstruction.
In Jefferson alone I believe that they could realize over to $250,000 annually- without eliminating a single position. Lord knows how much Jackson County could find.
SECOND, I believe that within the last decade public opinion (especially in a conservative state) has shifted to some degree to expect their local governments to be run like a business. We want to eliminate programs deemed as unnecessary, we want super efficient government offices, we want ultra lean payrolls, we want to know that our tax dollars are being effectively spent in the most beneficial way possible for our City, State or Nation.
With that being said, it seems as many of us expect to have the government operate like a business without treating its employees like business employees.
I think Mike is intelligent and he understand that City Manager Ward is good at what he does. Could he leave for another City or County position and nearly double his salary? I'm sure.
Did he? No.
Why? I'm not sure. But I bet it MIGHT have something to do with the fact that he works for a City Council that recognizes his hard work for the citizens of Jefferson and that they support him when he does a good job for the taxpayers- including but not limited to a cost of living raise where one had not been issued in (from what I understand) 2-3 years.
After all, it's important to remember that 5 city councilpersons voted for or against the 2011 Jefferson budget. In my dealings with my local councilperson I made it clear that I appreciated the services I receive from the City- that they're doing a fine job.
At the end of the day, I am all for us having high expectations for our local, state and federal governments and their employees. However, I think it's important to understand that they are citizens as well.
THIRD, really is just a question. What "other programs" or things are being done that you feel could be eliminated? or that make you contend that the City mill rate is "too high"?
I don't think any of the City employees would be foolish enough to argue that they "inherently deserve" any job- much less a raise. If they do then they need a lesson that you or I probably aren't able to teach.
In the end, I think my whole point was that it's obviously a slow week in Jackson County for one of our most brilliant thinkers and hardest working private business owners to spend time hammering the City government for having a mill rate less than HALF of the local BOE's mill rate.
While every city is different because of size of tax digest, homestead exemptions, etc. it seems to me that a city the size of Jefferson with its other resources and its tax digest composition should have a mill rate of 4.5-5.5 mill range for its city hall operations. There is no way to scientifically prove that or compare it to other cities, but based on the fact that I read dozens of city, county and school budgets and audits from four different counties each year, and have studied and written about government finance for 30 years, that's where I believe the rate should be. Nothing evil has happened, it just some creep over time has taken place in the city's mill rate. If the city didn't have a school system to also finance, it'd be a non-issue. But given that the city has the duality of purpose, I think some thought should be given to achieving a little better balance.
Could you help me understand how the State tax dollars are accounted for in the BOE budget?
I guess what I'm not understanding is this:
"Property taxes...make up 100% of a school system's LOCAL revenue stream."
I'm inferring that the key word is "local".
By that same argument could one contend that the BOE has the benefit of both a "local" and "state" revenue stream while the City has only a "local" revenue stream?
In reality, each government's total pie could be broken down like this:
City:
Property taxes
SPLOST
Impact Fees
Permits
Utilities (water)
Other fees (speeding tickets, recreation fees, etc)
Grants
BOE:
Property taxes
E-SPLOST
State funding
Grants
What am I missing?
I guess I would like to know how much STATE money does the Jefferson BOE receive in addition to the 14.5 mills they receive "locally"?
Furthermore, what are the total operating budgets for both branches?
Why would any bright and promising college student now want to enter the education field? I'll answer this one: they won't.
You get what you pay for...