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Q&As On The Schools/Property Tax Plan For Madison City Schools

Updated: 01/03/2019

Power Point of Mr.Parker's New School & Tax proposal.
BOE Prez Ranae Bartlett on the value of a good public school system.
Ms. Bartlett Op-Ed on successes of MCS and challenges ahead.
Supt. Parker's Leadership Perspectives interview on WHNT-19.
Top 50 per-pupil spending school districts in Ala. (Madison ranks 82nd)
Madison City Schools gets straight-A report from Ala Dept. of Education   

FAQs (Frequently Asked Questions) on the new school and funding plan. 

Where does the 12-mil property tax/school building plan proposal stand currently?
The Alabama Legislature convenes in March and is being asked to put the tax referendum on the ballots for voter approval.
Madison and Triana city councils unanimously approved resolutions asking for it.
Legislation must be drafted and publicly advertised four consecutive weeks before it can be introduced in the Alabama Legislature. Officials want a vote some time this fall to enable construction to begin as soon as possible if approved.

What does Mr. Parker's Strategic Plan call for including cost?
Elementary school ($34 million), middle school ($49 million), high school additions ($18-$20 million), $3.5 million for additional operational support (SROs, counselors, teachers, utilities). Proceeds from the proposed ad valorem increase will also be used to repurpose West Madison Elementary into a districtwide PreK Center, incorporate a districtwide Performing Arts Center at the new middle school campus and complete several priority deferred maintenance projects. 

Where will the money come from and why is it needed?
Mr. Parker is proposing a 12-mil increase in ad valorem (property) tax which would add $254 per year of property taxes (or $21 per month) on the average home value in Madison of $211,800 (Zillow).
The school system's consistent enrollment gains is unsustainable. (3rd fastest growth of 137 Alabama school systems). MCS is reaching a critical point in capacity. Just from the end of the school year in May to the beginning of October, MCS has grown almost 430 students. That’s the enrollment at West Madison Elementary alone. Packing more students on existing campuses would overtax lunchrooms, gyms, hallways and other school operations. Approximately 200 kids had to be turned away from PreK this year for lack of space. Expanding schools versus building additional ones would also worsen traffic congestion around what would be even bigger schools

Why not just pay for schools out of your current budget?
The system is efficiently spending money on priorities, leaving virtually little or no  extra in the budget. Because Madison City Schools is a relatively new school system, the budget is still paying for a lot of schools. So its debt is high ($156 million) from multiple mortgages. Also, because the state funds schools in arears, the system has to absorb teacher growth units out-of-pocket each year and doesn't  recoup that until the following year. This is particularly burdensome on fast growing systems like MCS.
Madison City Schools is house poor and can’t borrow any new money until after 2030 and even then it would only support a $39 million bond issue.

How will these needs be paid for?
Finance construction with bond issues contingent on approval of a 12-mil property tax increase for voters to decide. A mil is a unit of measure (1/10 of a penny) used to calculate property tax based on its assessed value. A 12-mil hike would add $120 in property tax per $100,000 value of home, or $10 per month on the mortgage. For a $200,000 home, it would add $240 per year or a $20 monthly mortgage increase; a $250,000 home would see a $300 yearly increase ($25 per month); a $300,000 home would see a $360 yearly increase ($30 a month), and so forth. The actual financial impact to families would be less because property taxes are deductible on income tax.

The projected cost for the new schools seems  high. What is that based on?
The estimates include building, land costs, furniture and fixtures, technology, and professional services such as architectural and engineering. The school system's architectural firm (Nola/ VanPeursem Architects) and construction management company (Volkert Inc.) worked up the estimates using a systemwide facilities assessment report, growth projections, inflation factors and analysis of school construction in comparative school districts.

When is the earliest date that 12-mils can be implemented and when would Madison City Schools begin to get the new revenue?
The short answer is a public vote by fall 2019, with construction starting in early 2020. Since property taxes are collected in arears, the earliest MCS could receive any money would be fall of 2020. Voter passage would enable construction to start immediately, with initial payments on that debt to begin when property revenues are collected beginning October 2020.

What about the Limestone County tax case that included tax revenues for Madison City Schools?
That case was settled a year ago. Madison City Schools is receiving its share of education taxes being collected in Madison portions of Limestone County.
The taxes that were in dispute involved countywide property taxes in Limestone County and a sales tax collected from Madison businesses in Limestone.
It is very important to know that the new 12-mil property tax being proposed would be a CITY school millage, not a county or district millage that was litigated. The proposed 12-mil school tax will be collected in Madison City in both counties and remitted totally to Madison City Schools.
The Limestone settlement was worked out equitably in 2017 with neither side getting everything it wanted. The existing 11-mil Madison City ad valorem education tax was never an issue in that case, and the new 12-mil Madison City ad valorem education tax (if approved by voters) won't be either. More about that Limestone case can be found in this link . 

The Strategic Plan calling for new schools assumes approval of the proposed increased tax revenue for Madison City Schools. What is the fallback if the 12 mils is not approved?
The superintendent and board believe the community will provide the tax revenue necessary for Madison City Schools to continue its excellence for current and future Madison children and residents. Given the continued student population growth that will occur - even just on approved lots within current city limits – and the already existing stresses on the system’s resources, the current path is unsustainable with existing revenues.
The 12-mil proposal is what the superintendent, using Growth Impact Committee findings, feels is necessary to address future enrollment increases. If the proposed increase is not approved, continued enrollment growth could require extensive rezoning, split sessions, year-round school, worsening pupil-teacher ratios, significant program cuts and other actions that would jeopardize the quality of the educational product offered by Madison City Schools.
School board leaders believe that doing nothing would erode the educational quality of MCS and harm students, decrease home values, deter employers from locating here, and force other major actions.

What is the school system's debt burden?
Of 137 public school districts, Madison City Schools ranks 23rd highest in debt-to-total expenditures, according to the finance division of the Alabama State Department of Education using 2016-17 figures. The state average is 5.37 percent of debt in relation to total expenses. Madison City is at 7.66 percent.
Looking at it from a debt-per-student standpoint, Madison City spends $715 per student annually toward debt compared to the state average of $515.

What does 1 mil net Madison City Schools per year and what would 12 mils allow you to borrow?
1 mil generates approximately $676,000 annually in the City of Madison, so 12 mils would bring in $8.1 million per year. That would authorize borrowing about $128 million for 30 years, depending on interest rates and other variables.

Is MCS we really that strapped for funding in a community like Madison?
Madison City Schools ranks 82nd out of 137 public school districts in Alabama in per pupil spending, according to the Alabama Department of Education. The district's $9,339 per student spending is below the state average of $9,671. The lowest per-pupil spending district is $8,140 and the highest is $13,141. Madison City Schools perpetually ranks poorly in pupil-teacher ratios because of its funding dilemma and is currently near the bottom (129th out of 137 school districts). Only one year in its 20-year history did MCS place better than 100th.
All other years the district has endured high pupil-teacher ratios which won't likely change without additional revenue to help pay for schools.

How can residents be sure money from the 12-mil will go only to schools?
It will be clearly spelled out in the agreement with the City and in the legislation putting the property tax on the ballot. It will be a Madison City tax limited to use for public school purposes by Madison City Schools that may be expended solely by Madison City Schools.

Will the tax increase also apply to Triana and Limestone, and if so, will Madison City Schools get 100 percent of it?
The additional millage would apply throughout Madison’s city limits, including all parts of the City in Limestone County. The additional millage of city tax will be proposed for public school purposes so all of the proceeds will go to Madison City Schools.
An identical millage hike is being sought by Triana.
Triana’s attendance agreement with Madison, approved at the time Madison’s school system was created, includes provisions for Triana to match any increase approved in Madison within one year. As long as the attendance agreement with Triana remains in place, all proceeds from such increase in Triana must go to Madison City Schools. Superintendent Parker and Board, along with the Triana leadership, Believe that Triana will be supportive of continuing its successful partnership with Madison City Schools. Triana leaders have been advised to include a provision in their 12-mil property tax proposal that would negate it if Triana's passes and Madison's 12-mil property tax fails.  

The Strategic Plan presentation suggests our high student-teacher ratios are due largely to funding deficits resulting from growth. Why is this?
The state funds school systems in arrears. In other words, Madison City gets its per-pupil allocations from the Alabama Department of Education based on its previous year enrollment. MCS has grown by more than 420 students since the end of the previous school year. That’s additional teaching units and other expenses MCS must absorb out of local funds until the funding catches up. This budget formula is burdensome for fast growing systems. The lag in this year’s budget, for example, requires Madison City Schools to cover $3 million from growth impact that will not be covered until next year’s state funding allocations.

Why is MCS's per-pupil revenues so low compared to other Alabama public schools?
Per-pupil revenue rankings are from several factors including the amount of local tax support, and the percent of students living at or below poverty which qualifies the district for additional federal money. Madison City Schools is “house poor” in that its exceedingly rapid growth has required it to borrow to build new schools faster than growth in revenue can occur. Consequently, MCS has disproportionately more of its money committed to paying for schools.
Madison residents also pay far less in local education property taxes  than other top performing school districts in Alabama. Here are the education millages in the top 5 school districts according to NICHE: (Mountain Brook, 52.9 mils; Madison City, 27; Homewood City, 37.5; Hoover City, 46.1; Vestavia Hills, 52.05).
Although Madison residents enjoy a top ranked school system while paying only 27 mils of tax for education, the school system simply cannot continue to compete with those collecting almost as much as twice in local support for education when MCS is saddled with so much demand for new capital construction.

If a third high school could be needed within 10 years, why not go ahead and ask for more property tax millage now to cover it? The Strategic Plan said a third high school would require the addition of 8 mils to the 12 mils being proposed.
Superintendent Parker said the district is only asking for what will solve the immediate, known need. There are 2,000 residential lots ready for development with other undeveloped land having the potential to be developed in Madison City. Mr. Parker said the new elementary and middle schools are urgent under growth that is certain and if funding is not available for a new high school when needed 5-7 years later, additions to the existing high schools will be adequate for up to a City population of 65,000. The school district has no control over annexations or the pace of growth. That is a function of the City of Madison.

What is being done to control growth?
Madison has slowed annexations and is putting more scrutiny in approvals for residential development. Triana has been asked to do the same. (city growth analysis)

What's the new out-of-district tuition for non-Madison school employees all about?
Madison City Schools allows employees who live outside the school district to enroll their children in MCS. The longstanding practice has required a student transfer request each year with one of the acceptance stipulations being on a space-available basis. Because of the district's unprecedented growth in recent years and the fact he is going to the entire community with a tax increase proposal, Superintendent Parker recommended and the Board approved a modest fee for these out-of-district students. The fee will be $360 a year (or $30 per month) available through payroll deduction. That cost is per household - not per child, and again, available only to out-of-district MCS employees who want to enroll their children in Madison schools. 
Several of the top performing school districts that Madison compares itself don't allow any out-of-district student. Mr. Parker said he wants to continue allowing children of out-of-district employees to attend Madison City Schools, and he feels that the $30 per month fee is not unreasonable.

Some out-of-district teachers have said they could support the fee with assurances their children can be guaranteed continued attendance at Madison City Schools. Is this an option?
Mr. Parker and Board consulted with Board counsel about a legal assurance. The Board attorney made it clear that they have no authority under Alabama law to do that. Mr. Parker has stated emphatically he has no desire to recommend a reversal of the policy which allows children of district employees to attend Madison City Schools. He explained the system can more easily continue allowing this as long as capacity is not an issue.

Other links to information:
Mr. Parker's video summary. https://youtu.be/I7vY3nJs4JQ.
Click here for supporting slides only.
What current and former leaders say about forming Madison City Schools

News coverage from the Madison City Council public hearing:
Madison Record: https://www.themadisonrecord.com/2018/11/14/madison-city-council-approves-school-boards-property-tax-proposal-residents-voice-strong-support/ 

WAFF-48
http://www.waff.com/2018/11/14/madison-city-council-pushes-forward-property-tax-proposal-some-locals-say-it-isnt-enough/

WAAY-31  https://www.waaytv.com/content/news/Madison-City-Council-approves-property-tax-increase-500450261.html

WHNT-19 https://whnt.com/2018/11/13/madison-city-council-meets-passes-resolution-to-support-tax-increase/

WZDX Fox-54 https://www.rocketcitynow.com/video/top-video/overwhelming-support-shown-for-madison-city-schools-tax_20181114030942/1595530437



 

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