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Education Referendum Town Hall Brings School Superintendent to Westchase

Wednesday, Oct. 3, found Hillsborough County School Superintendent Jeff Eakins laying out the district’s financial justification for placing a half cent sales tax referendum on the Nov. 6 ballot.

The town hall meeting at the Westchase Recreation Center was one of number scheduled across the district in recent weeks. Eakins spoke for about an hour to about 70 residents in the presence of about two dozen school administrators and Northwest Hillsborough school principals. He then spent about twenty minutes fielding questions from those present.

If approved, the half-cent sales tax referendum would increase Hillsborough County sales taxes by a half penny on each dollar spent over the next ten years. It would not, however, apply to food or medicine and would not apply to amounts above $5,000 when making major purchases. Eakins estimated it would cost the average Hillsborough County family, making just under $52,000 annually, $63 per year.

Eakins began by stating that Florida spends $4,000 less per student than the national average. Once ranked 27th in pupil spending, Florida’s legislature has let the state’s number drop to 41th in the country.

Eakins broke current district spending into operating and capital buckets while presenting a history of district funding sources, borrowing and spending that has produced the need for the referendum. The most recent challenge the district has faced has been resolving a $126 million annual deficit. He stated the district has helped balance its budget this year by eliminating 1,900 staff positions since 2015, nearly all through retirements and attrition, and looking for savings in areas like energy and busing. He stated administrators represent just one percent of the district’s employees. Eighty-six percent of the district’s $3 billion annual budget goes toward staff and salary costs and benefits, making cutting the budget difficult. “That’s been a huge challenge. We don’t want to undermine the education of our students in any way,” he said.

Financial Challenges

Eakins said the current district’s financial shortfalls in maintenance trace back to the 1990s, when Hillsborough’s explosive growth produced a need for 70 new schools, including Westchase Elementary, Mary Bryant, Deer Park as well as middle and high schools in the area. Faced with massive construction costs, the district placed a tax referendum on the ballot back then that failed. That left the district with the sole option of issuing bonds – borrowing the money – to build the needed schools. “We’re still paying that off to this day,” Eakins said, stating the bonds, representing $1 billion in debt, will be repaid in ten years.

Of the district’s originally budgeted $170 million annually for capital items and repairs, $65 million of it annually has to be diverted to make debt payments on these bonds.

Eakins stated the Great Recession had a second significant impact. Faced with plummeting tax revenues, the Florida legislature took funds originally raised for local schools from a half millage point on local property taxes and redirected those funds into state coffers. The cut represented an additional $35 million annually for Hillsborough County. The cut, he added, was never returned to state funding of public education.

With the original $170 million capital budget to replace and repair items like roofs and AC units now cut to $65 million annually, the district had only one solution. “You start deferring maintenance every year.”

Funds from the state lottery, Eakins added, have minimal impact. Those funds represent 0.3 percent of the district’s budget.

Now, he stated, the district faces an additional challenge: Hillsborough County is again growing quickly, yet the district cannot afford to build the estimated 38 new schools that will be needed over the next 15 years. “We can’t bond or borrow more money to solve the problem,” he said.

Current District Needs

Eakins stated the district currently faces $1 billion in debt from 1990s construction, $1 billion in deferred maintenance (the primary reason AC units are repeatedly breaking in local schools), and $1 billion for new school construction. Some of the building needs will be addressed by impact fees paid by developers – $4,000 per home. The amounts, however, still fall short of construction costs.

Eakins emphasized that many other Florida school districts have faced the same financial crunch. Stating many county districts have placed tax referendums on the ballot in the last two to three years, he added, “All the counties that have gone out to referendum recently have passed. “

Eakins stated Polk County benefits from a half cent sales tax, Pasco from just under a half cent, Pinellas from an additional half millage point on property taxes and Manatee from a half cent sales tax and a full millage point on property taxes. In contrast, Hillsborough currently benefits from one-eighth of a cent of sales tax, a small portion of the sales tax increase passed to fund the construction of Raymond James stadium. That money has already been committed.

Despite the fiscal shortcomings, Eakins stated Hillsborough taxpayers get a great return on investment. Based on scores from the State of Florida School Accountability Report, Hillsborough outperforms all those districts. Despite having greater diversity and greater amounts of poverty, Hillsborough has a score of 649 while Manatee has 641, Pinellas 635, Pasco 629 and Polk 595. Eakins credited the district’s hard working teachers with the results. “If we get that return for our current investment, imagine what we could do,” he said.

Eakins cited similarly sized Orange County, near Orlando, as Tampa’s primary economic competitor. Orange benefits from a half cent and a full millage point, offering that district $373 million in capital funding compared to Hillsborough’s $32 million from the one-eighth cent. Orange’s state score was 650. Hillsborough’s current funding levels, leading to AC issues and other deferred maintenance, could lead new businesses, concerned about employees’ families, to look elsewhere to relocate. “When you compare the two budgets, we’re going to lose the competitive edge,” said Eakins.

What Will Referendum Funds Cover?

If the referendum passes, Eakins said, it will provide an additional $131 million per year, which will be designated for AC repairs and replacement, renovations, maintenance, security and technology. The district released a list of 1,785 projects that will be funded across all schools, with a minimum of $500,000 spent per school. Needing new AC units, most Northwest schools, however, will see spending between $2-4 million each.  Over 10 years, 203 AC units will be replaced, 63 roofs will be redone, $25 million will be spent on new technology for classrooms and $23 million on safety and security enhancements. The referendum will also fund the equivalent of four new schools.

Overseeing the spending, said Eakins, will be a Citizens Oversight Committee, consisting of local leaders who aren’t part of the school board or its administration. Chaired by Betty Castor, the committee will have Sheriff Chad Chronister as its vice chair. Rounding out membership are Bonnie Carr, Earl Lennard, Ed Narain, Jose Valiente and a district leader to be determined. That committee will review all planned spending and will have to approve it before it goes before the school board for approval.

Eakins closed by fielding questions. Among them was a question about whether charter schools would have access to referendum funds. Eakins stated that only charters that own their buildings (rather than rent them) and which have deferred maintenance needs would be able to use the funds. He added that of the district’s roughly 50 charters, only five own their buildings.

Asked why the referendum would terminate the sales tax increase after 10 years, Eakins explained the district chose that timeframe so the tax increase would expire with the current bond payments covering 1990s’ school construction.

Asked what the district would do if the referendum fails, Eakins emphasized that further borrowing was not a realistic option. He added the district would continue to see deferred maintenance.

Eakins added that some referendum critics argue that the growing number of homes and home values in the county will increase property taxes, offering the district more than enough future revenue to meet its needs without seeking an increase. Eakins, however, stated the state legislature annually reduces the millage levels designated for school funding to offset these increases, keeping actual dollar amounts roughly the same. “School districts cannot capitalize on that growth,” he stated.

Eakins closed by reminding those present that the education referendum will appear as the last item on voters’ lengthy ballots.

All the town hall and referendum information is available on the Hillsborough School District’s website at http://www.sdhc.k12.fl.us

By Christopher Barrett, Publisher

Posted Oct. 4, 2018

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