Speech on Levy Increase Request

So a couple of years ago, the legislature changed the way funding in schools really operates. Essentially, what we were governed by prior was we had up to a $1.05 levy limit to spend, and that was per $100 evaluation. If you owned property, in a property, you didn’t have to contribute anything to the schools. For a long time, that was how school districts were funded.

What was challenging always for Blair was that for a while, we received what was called special grant funding, but we didn’t get it forever. For the last seven or eight years, we became a district that was unequalized, meaning we strictly lived off of property taxes, which, as you know as property tax owners, became burdensome. The legislature took action three years ago to help solve the property tax issue, and so with that came another source of state funding called foundational aid.

So we still don’t get the aid, but we started getting what’s called foundational aid. Foundational aid is $1,500 per student. As long as your enrollment’s growing or sustainable, then you get that money, and then enrollment drops, and you lose a little bit. So that helped. I mean, it helped a little bit. It gave us over $3 million, and we were able to reduce property taxes and bring those down.

But I want to just go back to the challenges that we’ve been under in our district in terms of school funding—they have been immense. Our district is one of the top 21 largest in Nebraska, so we’re big enough where there’s substantial expense to educate our kids and to hire enough staff to do so. Without any state funding over those years, it really became difficult to put money away into what was called a depreciation fund or a building fund. We pretty much, on the $1.05 that we were able to tax, spent it on staffing mostly, and for a handful of years, we didn’t put any money into the building fund.

The depreciation fund, like I said—until Mr. Shearer came, it was kind of unheard of—so we just kind of went year by year. Wherever we landed with the dollar five, we gave back to staff for raises, and what happened was really diminishing returns. We started passing on purchasing and busing. Our most essential curriculum, arguably, would be reading, and we didn’t purchase a new reading curriculum for 16 years, so we didn’t have the money to do it.

Technology—we were probably the last district in the greater metro area to go one-to-one, and it was only because of our local banks. Our teachers, our staff, went without too. We’ve regularly been at the bottom of what’s called a salary array. Some of you might say, “Well, that sounds terrible.” Some of you might say, “So what?” But it is terrible. I mean, it’s terrible for our teachers to be at the bottom of the array. By law, there was a law passed within the last 20 years, and you have to maintain 97% to 99%, meaning you’ve got to kind of get to the middle of the array.

Classified staff fared as poorly as our certified staff. Our classified staff had no benefits, limited hours—28 hours a week. Their pay was right at minimum wage and didn’t come much above that.

So in the last seven or eight years, we’ve tried to address the problem without raising taxes, and I’m proud of the work that we’ve done as a district. A lot of sacrifices were made by our staff, our school board, and I just want to show you that in 2011—if you look at the chart that’s up on the screen there—between 2011 and 2020, we spent flat. I mean, almost the same amount of money. In fact, our school budget in 2019-20 was $300,000 in spending higher than what we spent in 2011-12. We had 0% increase most of those years.

If you go year by year, since then, what we’ve had to do in the last few years: we had a bus fleet that was 17 years old with 180,000 miles that wasn’t safe. We’ve had facilities that haven’t been safe for kids and teachers to be in. So we needed to start spending on our bus fleet. Today, I mean, we’ve been buying multiple buses a year. We got back on cycle with our curriculum. Our curriculum is supposed to be on a seven-year cycle. So we’ve now bought reading once, math twice, science twice—this is the second year we did science. Otherwise, I mean, think about that. Our poor kids for 20 years had one reading adoption. That was it. This year we did a supplement to help with that.

So if you look, we didn’t go above 3% increase any of the years from 2011 up until last year’s budget. The last two years were our highest increases at like 2.8%. Now, the paper misinformed on that. They said that we actually increased by 9%. We increased one fund—our general fund—by 9%, but dollar for dollar, tax dollars, we actually taxed less. Our increase overall was 2.8%.

Now some of you might say, “Well, how did you grow 2.8% but tax less?” Because there’s more and more property value in Blair, and so we were able to tax less. So when you look at 20 years, our spending has been very, very controlled, and the only reason it’s gone up recently is to try to catch up on what we were unable to spend on for years and years and years.

When you look around, if you’re familiar with the district, we’ve had to make improvements to lighting inside and outside. Actually, we use a source for lighting that saves us money. It’s our third highest annual bill. So our LED lighting that we invested in actually saves tax dollars monthly. We’ve invested in buildings. We’ve gotten donations and grants, but we’ve kept spending very controlled, historically and over time.

What I’m asking for today is at least for one year to go above the 2.9%, and we can only ask—under the new law, we can only ask for $430,000. Before, we were asking for more than that because all of our school funding was coming from property. Now, thanks to Governor Hill and the legislature, your taxes have been reduced because of the new law, and we’re capped at 430, so we can’t go above this 3%.

When you look—and I’m going to make an argument that regardless of whether you live in Fort Calhoun, Arlington, Omaha, or Blair—I don’t think there are only two districts you would trade with. If you could pay taxes in any other district today, the only two that you’d trade with in our area would be DC West. I think there’s just one higher than us in Springfield, Platteview, and that’s for a whole other reason.

Otherwise, when you look at last year’s tax levies, we taxed a total levy of 0.77 on every $100 evaluation, and our general fund was 63 cents of that. We have some bond in there, and then we taxed six cents for the building fund. We used to be—in 2018-19, and you’ll see it on the next slide—we were one of the highest taxing school districts in the greater metro area. We were much higher than Arlington.

But when you start looking across the board there—what does this mean? This means that we’ve now had, according to last year, a lower levy than Arlington, who had 86 cents. So this would save you about 10% on the taxes. If you moved to Arlington tomorrow, you’d pay 10% more on the same value home that you have. If you moved anywhere in the metro area, you’d increase that by 15 to 20%. So it is a bargain, right? I know there are taxpayers saying, “No, it’s not. Our taxes are high,” but you wouldn’t want to trade places with any of these other school districts in the area because you’d pay a lot more.

What I’m saying is our general fund is what we pay for teacher salaries, what we pay for textbooks, what we buy everything with. It was once $1.05—it has dropped to 63 cents. A school district that mirrors us is Waverly. You might say, “Why do you have Waverly on this list?” Because it’s greater metro area. Waverly has about the same enrollment as us, same size classification. Their property value last year was $2.4 billion, and ours was like $2.8 billion. So their property value is about the same as ours, their demographics are about the same as ours.

But when you look at Waverly, there was a day when our levy was higher than their levy, and their general fund levy is still 97 cents. They voted to pass to exceed the state allocated amount the last three years, but they’re at 97 cents—or, I’m sorry, 83 cents general fund levy, 97 cents full levy. Eighty-three cents means they’re operating on 20 cents more than we are.

So to Dr. Sand’s point, when we’re competing with these school districts—Gretna, Bennington, Fort Calhoun—for teachers, we’re doing it on 20% less than what they are. It’s starting to catch up with us, and it’s only going to get worse if we don’t get the $1.7 million. I think that would push us ahead to where we could put more of our taxable dollars toward the general fund and take care of safety needs. I’ll get to the safety needs in a bit.

But when you look at this, it is a bargain to live in Blair as compared to other communities. When you go back, you don’t see us jumping all over the place. Over 20 years, we haven’t asked for very much, and right now we need a little bit more because, again, we pushed so many projects and things down the road, like student safety.

Student safety should be number one, most important for us. There are safety projects that we had in the bond at Arbor Park that failed in the community about a decade ago. We’ve tried to take care of a lot of the issues with our building fund and not raise taxes very much. But now we’re at a point where something’s going to break. I don’t know if it’ll break this year or next year, but something’s going to break.

We were finally able, the last two years, to give our staff a raise that got them to the middle of the array. If they were at the top of the array, I wouldn’t be asking you today, but they’re in the middle of the array. As we go into negotiations this year, I’m just saying this isn’t about teacher salaries. It’s about kids. It’s about kids’ needs.

What’s going to happen if we don’t exceed the levy? We’re going to get to a point where we’re going to give all that we have to wages again. Next year, when we have this million-dollar transfer, we’re going to get to a point where we’re not going to be able to either make the transfer or put money into the building fund.

Two years ago, we were able to put 10 cents into the building fund. So over $3 million we were able to put into our buildings and facilities. This past budget year, it went down to six cents. Half of that—we had to make cuts in administration this year and in our teaching staff this year to be able to produce a budget for the board that’ll be in that six-cent range. Again, we can’t continue to—I mean, we continue to cut, but we can’t continue to count on that year after year.

So when you look at our historical levy in Blair: 2014, 2015, 2016, 2017, we maxed out our general fund levy. We needed it to pay staff. Then we did two expenditure reductions. The first one was prior to 2018-19. The second one was in 2018-19, and we told taxpayers when we did the second one, we’re going to fix this. We’re going to put money away for the building fund and depreciation fund. We’re going to buy things when we need to. We’re not going to raise taxes.

We were able to do it successfully. When you look at 2018-19, when we were levying $1.18—that included our $1.05 general fund, our bonds—we weren’t putting anything in the building fund at the time. The next year, we lowered our general fund to $1.01. We started putting a little bit away into the building fund. We lowered taxes one penny.

Then the next year, we started putting away a little more in the building fund. We were able to lower our general fund, and then again, you started seeing your taxes go down to $1.08, and then eventually, by 2023-24, your taxes overall went down to 84 cents, and our general fund went down to 62 cents.

In hindsight, I wish I would have asked those years for it to only go to 70 or 72 cents. We thought we were doing the right thing by giving it all back to taxpayers and that we could manage our budget. I’m just saying that today it’s getting harder and harder.

Number one, I didn’t expect OPS to give a $10,000 wage increase and then Elkhorn to follow it up, and then other districts to start matching it. So all of a sudden you’ve got districts giving $10,000 wage increases. You’ve got minimum wage skyrocketing. So we had to do a transfer of $300,000 to the classified staff this year. I’m glad we did. They deserved it. But you know what it used to be? $30,000. I mean, that’s how much things have gone up.

Our staff—again, I shared that—but other things have gone up. I talked about bus replacement. When we made our plan to replace buses, we were predicting buses to be $82,000. We had our whole fleet to buy new. We had vans to buy new, and we were expecting $82,000. Well, guess what? They cost $138,000, and that’s not one with the coach seats and all that other stuff. That’s a normal, regular bus that we bought before is now $138,000. So there’s some inflation in some of the things that we’re buying.

Guess what else we didn’t expect? The storm that we had two weeks ago. Let me tell you what damage it did, and all of this has to come out of our special building fund. For example, we had roofs in all but one building. The roofs had damage to them. We had leaks that came into the building, so we had pretty significant expense on getting water out of there. We also had damage to HVAC units, and so we’ve replaced those HVAC units.

So right now, we had a little over $3 million in our building fund. All of this to pay for the storm’s damage is coming out of that $3.5 million. That’s our rainy day fund, and we have our rainy day fund, so that $3.5 million will come down. We hope that insurance will pay back, but I’m going to give you a couple of examples.

Some of our facilities are old, like our auditorium stage lights. There are eight lights. They’re original—as old as the building, 1969. Okay, so 50-some years old. Now, stage lights are LED, and there are thousands of options, not eight lights. To get the lights to turn, you’ve got to use a rigging system that brings them down, and the kids change the light bulbs by hand.

For us to replace that—because they don’t work because of the damage in the storm—for us to replace that, there are used stage lights from 1969, and that’s one option. We can buy these stage lights and put them back on, and then we’ll be neutral with insurance. To replace the system, it’ll cost a quarter of a million dollars to put new lights back in. Again, that’s something that insurance will cover. Some they’re not going to cover.

They’re not going to cover $200,000. Our rigging system is original too. We’ve been waiting the last few years to replace it. The board approved it, but we had to do some things structurally. Between this lighting and the rigging system, we need about $400,000-plus to update that auditorium. That’s just the auditorium. That’s not Arbor Park or Brooks.

Arbor Park building is one of our older buildings. Well, that’s one of our newer buildings, but it’s older. I mean, it depends on how you want to look at it. All we’ve done at Arbor Park is put a new playground in. In the last two years, we put new floor carpets in—otherwise they were all original carpets—and we put new LED lights in.

That system, the HVAC system that’s there, is on a boiler. If it goes down—and it’s the original boiler—if it goes down, the whole system is out. That’s going to cost a lot of money. That’s got to come from the building fund.

With the Deerfield building, you think, “Gosh, that’s a brand new building.” We’re still paying on it. The HVAC system in it stopped working last year. So we’re replacing unit by unit, and that’s our newest building. The same bond that we bought the Deerfield building with, we put the atrium in the OHS gym at the high school. Guess what? Last year we replaced the HVAC unit in the auxiliary gym, the wrestling area, the auxiliary area. All that bond that we’re still paying on.

So the other option we have is to not do this and go to a bond. But you pay on a bond for a long time, far longer than some of these things last. It costs more. So what we’ve been trying to do is put money away in the building fund, take care of things as they go, and keep taxes low.

So I’m sorry I talked so long tonight, but I think it’s critically important. When I talked to the Department of Education about the need to exceed the levy, what they told me is Governor Hill is serious about lowering property taxes, so is the legislature, and we want to do that too. We’ve proven that we can. We’ve done it. But sometimes there’s a case where there are tools within the law that the board can use to exceed the levy limit when you need to, when it’s wise to.

I challenge you, board members, tonight. This is a tool that you can use. It would exceed the levy limit by $1.7 million, and it would give us some breathing room, and it would answer some questions with this storm that I don’t know that we have the answers to yet. I don’t know—we’ve got an insurance company, we’ve got a meeting this week with FEMA—so we’re hoping to get money different ways to cover the expenses from the storm.

Just the amount of trees and things like that down—it was probably one of the worst storms, one of the worst disasters our district has faced, maybe ever. I mean, at least in the most recent memory.

I want to share the cost. If you own a $100,000 home, for every $100,000 of valuation, we’re asking for $26 a year if your valuation stayed the same. I mean, less than—if your home is $100,000. Now if you have $300,000, it’s $75. So now you’re talking about a couple cups of coffee a month. We’re not talking about a terrible amount.

Now, if your valuation went up 5% and you own $100,000, it’s $66. So if your valuations—I know a lot of your valuations went up—and if you have a $300,000 home, then it’s $66 to $180. So it’s about $200.

So when we say 6%, we’re not saying 6% of your total tax bill. It would be a 6% increase on what we’re able to tax. We’re only able to tax a small amount. We can’t go over that.

So I don’t know if you guys have questions for me, but we’ve had many challenges. The last thing I’ll say is you might look at some of our reserves and say, “Well, those guys have like $6 million in their cash reserve.” Eight years ago, we almost had to borrow money in January because we didn’t have money in our cash reserve.

Talking to the State Department of Education, our payroll budget is $23 million. People count on us for their living, their livelihood, their families. We cannot gamble with spending down these funds. So we wanted to have three months set aside. So we had $6 million set aside. That was when our payroll was $19 million. Now it’s two months. In just a short amount of time, inflation has hit and salaries have gone up, so we cannot gamble with our employees’ lives, our kids’ lives.

I just think we need the breathing room. We haven’t asked for it in 20 years. We have tried to be wise and take care of things. I think what this will help us do is take care of safety with our facilities, particularly Arbor Park, and other needs that come up. I think we’ll be able to take care of HVAC, different things. Have that rainy day fund guaranteed to be able to weather this storm, and we will be able to go into this school year with all the resources, and next year all the resources that we need, and know that we’ll be wise.

Part of the reason for the agenda item prior to this one was so that we work on keeping our budget in that 2.5% to 3% range where it was. The problem is, when you defer spending for so long, if you lump it all together at once, it’s just hard to spread it out. A wrestling mat 27 years old—we thought we were going to replace one, and we wound up replacing two or three because they were 27 years old. That might not sound like that much, but I think they’re supposed to last 10 or 12 years.

Our snow removal vehicle—we finally replaced one last year that had a hole the driver could put their foot through the floorboard. I mean, that’s how we’re exhausting resources, and we’re grateful to have most of this updated now, but we don’t want to get into a point where we’re going to have to say no, and we’re going to have to say no for more than five years, and we get back to where we can’t replace things on an annual basis.

So that’s all. I’m not asking for anything extravagant. I know it’s a lot to ask. I wish we didn’t have to, but when you look around the area, I’d still argue all it’s going to do is put us up three more cents. We’ll still be among the lowest in the area, and I just hope that you consider that.