As its meeting on Monday, the Washington County Commission will make a decision regarding the funding mechanism for construction of non-municipal county schools. Owing to a provision in state law (Tennessee Code Annotated 49-3-315) there is an opportunity for county government to cash fund all or a portion of the construction of these schools, and — in the process — limit the amount of tax dollars returned to the municipal taxpayers for construction of their own municipal school facilities. County Mayor Dan Eldridge is advocating that this approach be taken.
Legality aside, the broader question before the County Commission should be whether it is the proper decision to follow an opportunity simply because it exists, particularly when it will ultimately harm over half of the taxpayers in Washington County. Is it the right decision? Is it the fair decision? And is it the only viable decision?
The mayor’s proposal holds considerable merit for the non-municipal taxpayer, matching their contributions with municipal taxpayer revenue. The concern for the municipal taxpayer centers around the question of how reasonable it is to expect that they be asked to disproportionately fund the construction of non-municipal school facilities — facilities from which they derive minimal benefit.
As developed, the proposal rolled out in February suggests that the county will perform $67,918,000 in non-municipal school-related capital projects, supported by both municipal and non-municipal tax dollars, and that the municipal taxpayers will receive in return $29,542,000 to apply to their municipal school system’s capital needs. The result of this failure to share tax proceeds proportionately is that the municipal taxpayer ends up foregoing $30,687,000 in potential division of property tax. That is a significant disparity.
The money applied to the construction of non-municipal schools is sufficient to build two new schools and make renovations to at least one additional school. The mayor is transparent that the dollars that come back to the municipal taxpayer will only construct one new school and allow major renovation at another, which he opines is adequate because only one new school is projected in Johnson City in the next five years.
Unfortunately, the second new school will likely be necessary within a five to eight year window, as capacity at Indian Trail is 98 percent and our elementary school capacity stands at 91 percent. The loss of $31 million in proportionate sharing will result in the municipal taxpayer being asked to pay an additional 10-12 cents per $100 of assessed valuation without any assistance from the non-municipal county residents.
There has been considerable effort to make this appear to be a complex issue. Distilled to its essence, it actually is a fairly simple matter -- the approach will ultimately lead to a double taxation of the municipal taxpayer.
The most equitable approach would have been a rural-only tax increase, where the end-user of the non-municipal schools is the entity that pays the tax. I believe that the municipality would have accepted that it was being handed the responsibility of funding the cost of constructing its’ own municipal school facilities and viewed it as fair. And to Eldridge’s comments lauding tax fairness, the municipal taxpayer would not have been paying the county assessment of 30 cents per $100 assessed valuation, nor would it have been paying a municipal assessment until it was ready to begin construction of its’ own facilities — a true savings to the taxpayer.
The County Commission does have the option to roll back a portion of the tax increase and replace it with a rural only tax for school construction. That would certainly be fair to both the municipal and the non-municipal taxpayers. Alternatively, the County Commission could provide for the proportionate sharing of taxpayer education dollars in a manner that does not ultimately prove more burdensome to the municipal taxpayer. These are reasonable and fair options.
Absent an equitable approach to sharing of tax dollars, it is reasonable to anticipate that the municipality will begin to question whether maintaining a separate school system is affordable. Consolidation, or the simple transfer of the municipal school system to the county (which does not require county approval), becomes a consideration.
Should it occur, there are costs and there are advantages that inure from combining the two systems.
On the cost side, the County Commission would incur at least $8 million in costs associated with bringing the level of funding for the non-municipal schools up to the level currently received by the Johnson City system. The Commission would additionally assume responsibility for the yearly municipal commitment to the Johnson City system of approximately $11million dollars in recurring costs and $4-6 million in additional costs.
Balancing the costs are distinct advantages. For the county, the non-municipal student finally enjoys a level of educational funding sufficient to improve educational attainment. For the City taxpayer there are no future municipal tax levies for education, there would likely be a roll-back of the municipal tax rate that exceeds the increased county taxes required to support a heightened educational commitment, future municipal tax levies to support school construction would be eliminated and there exists the potential for revenue to be generated from the sale or lease of municipal school facilities to the new educational entity.
And, for all, there exists benefit in ending the cause of most of the conflict between the two governing bodies — parity in educational funding.
The County Commission is to be applauded for recognizing the acute need for improved school facilities. Will they be applauded for employing a mechanism of funding that recognizes the importance of equity to the municipal taxpayer?
Ralph Jay Van Brocklin is a former city mayor and member of the Johnson City Commission.