School district considering 6-cent increase in property tax

and Scott Moyers ~ Southeast Missourian

When Cape Girardeau's former superintendent of schools, Dan Steska, was promoting a 58-cent tax increase last summer, he never promised that the schools wouldn't need another tax increase for five years.

But he did say that he didn't believe one would be necessary.

The tax increase passed -- by a scant 73 votes.

"I told people that I didn't anticipate us needing one for another five years," said Steska, now school superintendent in Normal, Ill. "Based on projections, I didn't think we'd need to come back."

Which is why on Friday Steska said he was surprised to learn a major financial setback has school officials considering a 6-cent levy increase.

"Something unexpected must have happened that we had not foreseen," Steska said.

School officials in Cape Girardeau say that's exactly the case.

The district expects to lose about $500,000 in local tax funding due to decreases in assessed valuation in the district.

The loss of funding could mean severe cutbacks in areas like new textbooks and athletic equipment unless that revenue is replaced, said superintendent Mark Bowles, who has been superintendent since July.

Public hearing planned

Bowles is recommending an increase in the district levy for the current tax year to $4.05 from $3.99. A public hearing on the recommendation will be held when the school board meets Aug. 26. The hearing is scheduled for 5:45 p.m. at the board's office at 301 N. Clark Ave.

The board can increase the levy without a vote of district patrons.

A 6-cent increase in the district's levy would increase taxes on a $100,000 home by $11.40.

At that meeting, the school board also is scheduled to approve the district's 2002-2003 budget. The district's budget year began July 1.

Bowles estimates the proposed 6-cent increase in the total school levy -- $3.49 for the operating fund and 56 cents for debt service -- would produce the same amount of local revenue as last year: $15 million, which is $500,000 less than the $15.5 million the district had anticipated before it learned the district's assessed valuation would go down 1.6 percent this year.

In recent years, the district's assessed valuation -- the tax value of property -- has been growing at a rate of 4 to 5 percent a year. With the slowdown in the economy, the district had conservatively planned for only a 3 percent growth in assessed valuation this year.

The decrease in assessed valuation for the school district is the first decline in at least two decades.

Bowles said he has worried about what the public's perception of the proposed levy increase will be.

"I haven't slept well since I found out about the assessed valuation," he said. "This is a huge concern of mine. I made the proposal with fear and trepidiation. But not because I feel like we're breaking a promise, though."

Bowles said district officials went out of their way during last year's campaign for the 58-cent levy increase to not make a pledge they weren't certain they could keep. Instead, voters were told the increase should be enough to get the district through the next three to five years.

"It's not that we saw anything like this coming," Bowles said.

Currently the district's operating levy is $3.52 with debt service at 47 cents for a total of $3.99. Bowles said he knew the debt-service levy would have to be increased by 9 cents and had hoped the operating levy could be cut by the same amount, leaving the total levy at $3.99. But with the reduction in the district's assessed valuations, the operating levy will only be reduced 3 cents, leaving a net increase of 6 cents.

School board president Bob Fox said it is unfortunate that a tax increase is being considered so soon after last year's vote.

"When we did our original master plan six years ago, we said we'd keep the tax rate the same as it was," Fox said. "But we had fallen so far behind we weren't able to keep up. We don't want to fall behind again."

Not considering a levy increase now, he said, "would be fiscally irresponsible."

He said that if the board decides to increase the levy when it meets Aug. 26, it could easily reduce it next year if the district's growth returns to normal levels.

Decreasing value

The county assessor, Jerry Reynolds, said the decline in this year's assessed valuation in the school district was primarily the result of decreases in the tax value of two local companies, BioKyowa Inc. and Lone Star Industries Inc.

BioKyowa discontinued one of its production plants in Cape Girardeau last year, resulting in the loss of 45 employees.

But Lone Star plant manager Steve Lues said wasn't aware that the county had reduced the cement plant's assessed valuation.

"I'm shocked to hear that," Lues said. "We haven't shut anything down. I don't know what they're talking about. I really don't."

According to city records for the first six months of this year, there were about $30 million in new construction permits issued, which is almost equal to the first six months of last year.

At its July meeting, the school board discussed the possibility of refinancing the district's $18 million in bonds issued in 2000, which would save the district thousands of dollars. The refinancing has been temporarily put on hold, Bowles said.

Huff said refinancing the bonds is still an option, but the district is waiting for the most opportune time to refinance.

cchitwood@semissourian.com

335-6611, extension 128

smoyers@semissourian.com

335-6611, extension 137