Lindbergh to collect $1 million less in taxes than last year

District’s CFO discusses loss of $14 million since 2007-’08.

By MIKE ANTHONY

The 2010-2011 tax rate approved last week by the Lindbergh Board of Education will generate roughly $1 million less in revenue than last year.

The Board of Education voted 4-0 Sept. 28 to set the school district’s 2010-2011 blended tax rate at $3.2130 per $100 of assessed valuation. Board Vice President Vic Lenz, board Treasurer Mark Rudoff and board member Kara Gotsch were absent.

The 2010-2011 blended tax rate includes an operational tax rate of $2.8330 — 6.42 cents more than last year’s rate of $2.7688.

Lindbergh does not assess the blended rate but four rates by property class: residential, commercial, agricultural and personal property.

Individual property-class tax rates, per $100 of assessed valuation, are as follows:

• Residential, $2.75 — unchanged from last year’s rate.

• Commercial, $2.9554 — a 20.54-cent increase over last year’s rate of $2.75.

• Agricultural, $4.1487 — a 14.67-cent increase over last year’s rate of $4.0020.

• Personal property, $3.0444 — a 14.8-cent increase over last year’s rate of $2.8964.

The debt-service tax rate of 38 cents per $100 remains unchanged from last year.

Lindbergh’s assessed valuation dropped $54,710,330 from last year — to $1,215,449,600 from $1,270,159,930.

No residents spoke during a public hearing on the proposed 2010-2011 tax rate at which Chief Financial Officer Pat Lanane outlined how the decrease in Lindbergh’s assessed valuation would result in the district collecting $1,014,000 less in tax revenue this year compared to last year.

“… Total property taxes for all categories added together dropped by over a million dollars. It was right at $1,014,000,” he said. “So again, the recession continues — more bad news in terms of finances for the Lindbergh School District. And of course this million-dollar loss, this is actual taxes. This is not assessed value or any of those other working numbers. These are hard dollars to the school district and so that follows unprecedented losses last year.

“So again, we’ve had two really downturn years in terms of local property tax and again as everyone is painfully aware our budget is primarily local taxes — 92 percent. And of that 92 percent, the majority of that is property tax … So again, no real good news there.”

Noting the residential property tax rate is unchanged from last year, Lanane said, “On the average, residential taxpayers will pay less for 2010 than they did for 2009 and they paid less in 2009 than they did in 2008 …”

Because of conservative budgeting, he said the $1 million loss of tax revenue “will not show up as a million-dollar loss in our budget. When we did our budgeting, I knew the recession had not bottomed out at that point. I don’t think anybody thought it was finished at that point. I really didn’t think it would do another full million dollars. We did budget for about a $600,000 loss.

“So the net disturbance and negative to our budget will be about $400,000. We won’t necessarily amend our budget yet. We’ll wait and see what other revenue sources do. Sales tax — it looks like it might be up ever so slightly. We can always hope that interest rates on our investments will come up … It wouldn’t take very much really for us to recover that, but we just don’t know at this point. Right now, I’m counting on a $400,000 loss.”

For the current school year, the Board of Education approved more than $4.7 million in budget reductions and eliminated roughly 60 positions, including 45 teaching positions. Even with the $4.7 million in reductions, the school district still faces a roughly $4 million budget shortfall, not including the additional $400,000 loss in revenue Lanane now is projecting.

The chief financial officer discussed how the decline in the district’s assessed valuation since the 2007-2008 school year has resulted in a cumulative loss of $14 million in tax revenue to the district.

“… When assessed values go up, most people’s property taxes do go up. I think everyone understands that, that owns a house. That’s not a shock to anybody that that would happen. And one of the nice things that has happened for houses in the Lindbergh School District, they have benefited greatly — I think directly due to the quality of the school district — to their values …,” Lanane said. “So if you look at a house that was purchased in 1997 for $150,000, we kind of tracked what happened to it all those years in terms of the value. And it had nice increases. That’s really good news for that property owner to see their house go up in that kind of value. So that same house in 2007 reached a high of $255,000. So from $150,000 to $255,000.

“That is a very nice increase in your value. It would have been hard to invest money and do much better than that …”

But since 2007, the value of that same home has declined by 8.74 percent, he said.

“That is not what you’d want to see any investment you ever made do … Not a good investment at that point. However, the other thing that happened during this period of time was the drop in taxes paid … So back in 2007, it was $1,522. 2010, their taxes would look more like $1,389 …,” Lanane said.

“… When we talk about a cumulative loss of $14 million (in tax revenue), that’s how it happens. It’s exactly how it happens …,” he later said. “I hear from both sides of the coin on this. Occasionally I’ll hear someone sheepishly kind of grin and say: Yeah, my taxes went down, but at the same time they begin to think they went down because the value of my house fell almost 9 percent. They’re not so happy about that because most individuals, particularly — we are a senior-type community in many ways and when you think about senior finances, they usually have two main revenue sources. One is their retirement and the other is their house.

“So when you look at the one asset they have, it’s actually not done very well over that period and the fact that you’re paying less taxes is not much consolation when you see the kind of loss on a $400,000 house is a $60,000 loss. There’s not much consolation in that …”