Mon, Feb. 24

Editorial: Property tax study shows steady bottom line for consolidated district

Proponents of the effort to consolidate the Cottonwood-Oak Creek and Mingus Union school districts will tell you it’s not just about the bottom line.

Yes, they claim, we can save more than $1 million by merging the two districts into one with a single administration, business office, transportation system and food services department.

The money saved, the proponents claim, can be re-channeled into the classroom, equalize teacher salaries between the two districts and ultimately improve student performance.

But getting back to that pesky bottom line, there are many in the Verde Valley who want a straight answer to how a marriage of the two districts will impact them financially, as in the number of zeroes that follow the dollar sign on their annual property tax bill.

Apparently, it won’t.

That was the conclusion reached by former Mingus Union Business Manager Kirk Waddle, who did the study at the request of the former, interim, MUHS Superintendent Jack Keegan. Further, it’s a study that passes muster with Cottonwood-Oak Creek’s Business Manager, David Snyder.

A consolidated Cottonwood-Oak Creek, Mingus Union district would take on the boundaries of the Cottonwood-Oak Creek District. In effect, Mingus would divorce itself from the boundaries of the Clarkdale-Jerome School District and the property tax bounty otherwise known as the Phoenix Cement plant.

But thanks to the state’s school equalization formula, any shortfall a consolidated district would see in locally generated property tax would be made up with state funding.

Currently, 84 percent of the Mingus district’s maintenance and operations budget is funded by local property tax with the other 16 percent coming from state equalization funds. By comparison, according to Snyder, Cottonwood-Oak Creek is split about 50-50 between local property tax and state equalization funds. That difference in tax burden between the two districts, explained Snyder, is “mostly because of the assessed value of the cement plant, and the amount of property taxes the plant provides” to Mingus.

In other words, the greater the assessed valuation a school district has, the less the state will chip in to finance its operations. For example, the Camp Verde School District receives about 64 percent of its maintenance and operations budget from state equalization and 36 percent from local taxpayers. The Sedona-Rock District, on the other hand, with its much higher property values, is what is known as a non-state aid district. “What that means,” explained Lynn Leonard, the former Sedona business manager who now has that role for the Mingus district, “is that the Sedona taxpayers generate 100 percent of the tax revenue for the school district and we receive zero in state equalization.”

And as it all applies to a Mingus-C-OC merger, Snyder explained, “If the Mingus boundary, or unified boundary becomes the same as the current COCSD boundary, the state equalization would fund the reduction of the assessed value from the removal of the Clarkdale district assessed value.  Many people have the misconception that increasing the property tax rate for the district will increase our budget or funding.  We can budget no more than the limit applied by the state established by our student counts.  Changes in yearly debt service would have an effect on the secondary rate, but most bond issues have a similar amount of debt service each year.

“I agree with (Kirk Waddle’s) analysis in that there would be little change in the tax rates.”

That’s the bottom line.

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