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What's your opinion on the high school referendum?

 
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Ellen
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Location: Oak Ridge, Tennessee

PostPosted: Tue May 25, 2004 11:07 pm    Post subject: What's your opinion on the high school referendum? Reply with quote

Voters in the Anderson County portion of Oak Ridge will be asked to vote August 5 on whether or not to increase the local option sales tax by half of one percent (0.5%) to fund the rebuilding of Oak Ridge High School (building "a 21st century high school" at the current site).

The specific question on the ballot will be
Quote:
Shall an ordinance passed by the City Council of Oak Ridge, Tennessee, on May
17, 2004 numbered [TBD] and published in the Oak Ridger, a newspaper of
general circulation in Oak Ridge, which levied an additional tax on the same
privileges subject to the Retailerís Sales Tax Act under Chapter 6, parts 1-6,
title 67, Tennessee Code Annotated as the same may be amended, and which
amended ordinance no. 7-83 of the City of Oak Ridge to increase the local option
sales tax rate in those portions of the City of Oak Ridge, Tennessee, that lie in
Anderson County, Tennessee, from 2.25 percent to 2.75 percent; provided,
however, the revenue from such increase shall be appropriated and expended
for the purpose of funding and paying for construction, renovation, purchase
of capital equipment, and/or retirement of school construction debt service
for the Oak Ridge High School, and at such time as the high school debt service
is paid in full, the sales tax proceeds collected as a result of this increase
shall be distributed as prescribed by state law, except as modified or limited by
statute become operative?

A vote "for the ordinance" is a vote to increase the sales tax.

Roane County residents in Oak Ridge are not eligible to vote on this question. Roane County already has a 2.75% local option sales tax.


Last edited by Ellen on Mon Feb 28, 2005 8:15 pm; edited 2 times in total
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Ellen
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Location: Oak Ridge, Tennessee

PostPosted: Thu Jun 24, 2004 3:20 pm    Post subject: What is Ellen's opinion? Reply with quote

I haven't posted my views on the referendum previously because I had not yet learned enough to make up my mind about this complex question. I still have many questions and concerns, but The Oak Ridger has asked all 4 City Council candidates for their views, so I finally had to weigh in.

Below is the statement I provided to the paper. It probably will appear on Friday, in edited form.
Ellen Smith wrote:
I will support the referendum. Education is the single most important function
of our local government, and we must not neglect its needs. It is clear to me
that the high school needs major work. I believe we would be better off in the
future with a comprehensive overhaul of the entire facility, instead of
piecemeal repair and partial replacement of the existing structures. Last year I
participated in the stakeholders committee that considered possibilities for a
"21st century school," and I was impressed by the ways that new facility design
could enhance the school's educational program and save on operating costs.

However, I have some deep reservations about this proposal.

I think that the sales tax is already too high, particularly because it applies
to basic necessities of life such as food and kids' clothing. I don't like the
idea of making it even higher. However, until the state of Tennessee adopts a
more equitable overall tax structure that redistributes some of the costs of
state and local government away from property and sales taxes (which
disproportionately burden those who can least afford to pay), the City need to
use the options it has. A local sales tax increase looks like the best option we
have to pay for this project, but I don't like it.

Also, I am very concerned about the cost of this project. Unless City revenues
increase substantially (something we can hope for but should not pin our hopes
on), this one project would absorb most of the City's capacity to borrow money
for general-fund capital improvements for more than two decades. At the recent
League of Women Voters' forum, Steve Jenkins explained that we would still be
able to undertake a few capital projects on the 5-million-dollar scale during
that period (my notes say that his model showed windows of opportunity in 2008,
2013, 2019, and 2025). Unfortunately, this is not likely to be enough. During
those decades Oak Ridge will not only need to deal with the projects on the
City's current wish list (these include a new preschool building and a new
senior center) and the usual collection of recurring needs such as highway
projects, but we will face other facilities needs that have not yet appeared on
our planning horizon. For example, in the next two decades, several other civic
buildings will reach roughly the same life stage that the high school is at now
(I'm thinking particularly of the "new" Linden School, the two middle schools,
and the civic center complex), and may need major renovations. If the City
acquires the American Museum of Science and Energy or the Emory Valley Center,
we would need to look at capital improvements on those properties, too.

I will support the referendum, but if it passes, the school system and the City
should look hard for opportunities to scale back the proposal to make sure it is
something we can truly afford. The conceptual proposal that emerged from the
committee that I sat on included some items that can be considered "wants"
rather than "needs," and I believe it would be possible to scale back on some of
these without diminishing the overall positive impact of the project.
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PostPosted: Fri Jun 25, 2004 11:04 pm    Post subject: Reply with quote

Ellen, I couldn't agree with your answer more. I think the price tag for this is way off the mark. Still, I will reluctantly support it. While I may be wrong, I think the School Board seems to take their funding from the city for granted. I would like to see more fiscal discipline now, before they lose trust with the residents of Oak Ridge.
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PostPosted: Tue Jul 13, 2004 7:23 am    Post subject: Reply with quote

I'm voting FOR it with great enthusiasm.

1) For the price of just fixing it (about $40 M), we get a completely renovated school ($58 M or less) designed to meet current instructional needs. The other $18 M comes from private sources and QZAB bonds.

2) People who work and shop but don't live here (and don't pay property taxes here) provide about two-thirds of the sales tax revenue -- so Oak Ridgers will only pay about a third (less than $14 M) of that amount. That's less than the $15 M in urgently-needed repairs that will have to be funded through property taxes if the referendum fails!

3) If you had a Picasso and kept it in your basement, it would degrade over time. That's what we're doing to our high school. We still have the faculty to maintain the excellence we've had in the past, but we will only maintain and grow that asset if we properly protect and nurture it.
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PostPosted: Fri Jul 16, 2004 10:26 pm    Post subject: Reply with quote

Guest #2 wrote:
The other $18 M comes from private sources and QZAB bonds.

It would be nice if things were that simple, but they aren't. The QZAB bonds are not free money. These are bonds issued for 14 years at zero interest -- an interest-free loan that must be paid off after the 14 years. If the project uses $8 million in QZAB bonds, it will make a nice dent in the cost of debt service for the project (that's a very real savings! Cool ), but it will not reduce the capital cost. See http://www.qzab.org/ for information about the QZAB program.

Guest #2 wrote:
People who work and shop but don't live here (and don't pay property taxes here) provide about two-thirds of the sales tax revenue -- so Oak Ridgers will only pay about a third (less than $14 M) of that amount. That's less than the $15 M in urgently-needed repairs that will have to be funded through property taxes if the referendum fails!

I bet you work in advertising or public relations, "Guest," because you are good at making a product sound like a better deal than it probably is in reality. Wink

When deciding on a matter like this one, we need to think about "opportunity costs" -- what future options are we foreclosing by making this choice? There are no free lunches. With respect to the sales tax, we could be foreclosing several possible opportunities:

1. The opportunity to increase the local option sales tax and use the revenues for something else. In effect, we must decide that the high school project gives us at least as much value as the other things we might have wanted to do with that money in the future. From my conversations around town, I believe that most voters feel that the ORHS project is worth it.

2. A chance for friendlier relations with our neighbors in the surrounding counties and towns. A major source for the sales tax that is paid by "people who don't live here" is shoppers who don't live here. Many of these shoppers live in areas that have fewer financial resources and greater civic needs than Oak Ridge. Folks from other parts of Anderson County and the surrounding counties have already started registering their resentment of the idea that they will be paying for Oak Ridge to upgrade its already superior school system. If we raise the sales tax, we must expect to live with that kind of resentment for a long time. Sad

3. A small amount of federal government funds that otherwise would be injected into other parts of the local economy. Another source of sales tax that is paid by "people who don't live here" will be BWXT Y-12 and other DOE contractors in the Anderson County portion of Oak Ridge. (DOE contractors pay a "use tax" on purchases, levied at the same rate as the sales tax.) Congress will not increase its appropriations to Y-12 in order to pay the increased sales tax, so money that these contractors pay for sales tax is money that is not be available for some other use (such as paying a few additional workers). Fortunately, the amount is small relative to the total size of the Y-12 budget, so it's probably not worth worrying about, but this helps illustrate my point about "no free lunches."

After considering all of the facts that I can assemble, I support this referendum. However, I think we should go into this project with our eyes wide open and with a full set of facts, not a collection of half-truths. If elected to City Council, I will support initiatives (such as this one) that offer value to Oak Ridge, but I will try to avoid being taken in by slickly packaged over-simplifications.
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PostPosted: Sat Jul 24, 2004 9:52 am    Post subject: Reply with quote

If the taxes "go away" after paying for the high school - will it revert to the state? If so, why don't we claim this amount forever as there are many needs in our community beyond just the school. While i dislike paying taxes like everyone - i don't mind paying them if i feel i am getting my money's worth...
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Location: Oak Ridge, Tennessee

PostPosted: Sat Jul 24, 2004 12:24 pm    Post subject: Reply with quote

Quote:
If the taxes "go away" after paying for the high school - will it revert to the state?
Once we enact this new local sales tax, the tax will remain in place forever (or until the state changes the underlying taxation laws). Confused When we finally finish paying for the school (which will take about 25 years), the city could use its share of the tax (I'm assuming the county would have already claimed a share) for other civic purposes.
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PostPosted: Sun Jul 25, 2004 1:01 pm    Post subject: Reply with quote

A recent newspaper article reported that polling of "early voting" participants shows that a clear majority support the referendum. This is also my impression, based on conversations with people around the city (although I have talked with numerous referendum opponents, too).
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PostPosted: Wed Jul 28, 2004 11:32 am    Post subject: Reply with quote

if we can take this tax for school use now - why will the county or state be able to claim any of this in the future. if this portion is added for local use today - we should keep for local use in the future.
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Ellen
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Location: Oak Ridge, Tennessee

PostPosted: Wed Aug 04, 2004 8:20 am    Post subject: Reply with quote

Anonymous wrote:
if we can take this tax for school use now - why will the county or state be able to claim any of this in the future. if this portion is added for local use today - we should keep for local use in the future.
That does seem logical, but it's not the way Tennessee's law works. Confused

Local governments operate under charters from the state.

The state empowers local governments to collect local-option sales taxes, so the state could take that power away. If this happened, the measure would apply statewide.

As for the county taking the tax, as I understand it, Tennessee law considers municipalities (such as Oak Ridge) to be subunits of counties. The county has the primary right to collect a local-option sales tax. If a municipality enacts the tax first and the county enacts it later, the municipality gets to keep part of the tax collections. Neutral
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Ellen
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PostPosted: Sun Aug 08, 2004 2:56 pm    Post subject: Reply with quote

Now that the referendum has passed by a wide margin, we are keeping this thread online because it includes some good discussion, but I will close the poll and close the thread to new posts.
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