LaBrae School Finance Updates
LaBrae Local Schools is reducing the rate of taxation in 2017 on the outstanding debt incurred when the District built the LaBrae Complex. The construction costs for building the new LaBrae Complex were acquired, as is typical with capital improvement projects of this magnitude, through the sale of bonds on the market. The original debt was refinanced in 2011 so the District could take advantage of historically low interest rates. The refinancing of the debt saved the District, and subsequently, LaBrae taxpayers, $631,644.17 in interest over the remaining 13 years on the debt.
In 2017, LaBrae Local Schools is able to compound the aforementioned savings by initiating the return of unused principal from the bond levy to the taxpayers. The 2017 tax rate on the LaBrae bond debt will be reduced to 5.0 mills of taxation. The 2016 tax rate on the bond debt was 5.7 mills of taxation. This reduces LaBrae's overall tax millage from 56.5 mills in 2016 to 55.8 mills in 2017. What does this mean for a property owner in our community? The owner of a $100,000 home would have paid $199.50 in taxes for the bond levy in 2016. The tax paid will decrease in 2017 to $175 due to the reduced millage. While the savings are not overly significant on an individual taxpayer basis, they are monumental for the community as a whole.
The District is able to return the remaining unused principal, because the construction of the building project came in under budget. Moreover, the reduction in the tax millage on the bond levy results in less tax revenue to repay the annual outstanding debt payments. This unused principal will supplant tax revenue lost when lower tax rates on the bond levy are provided to LaBrae property owners. Each year LaBrae Local Schools evaluates the tax revenue from the bond levy and sets its tax rate with the Trumbull County Auditor's Office to ensure that the rate will generate enough money to make the coming year's debt payments. The last debt payment will be made in December 2024, which will mark the expiration of the bond levy.
Over the remaining life of the debt, and beginning with the 2017 tax year, LaBrae Local Schools will annually return a portion of the unused principal, $650,000 in total, to LaBrae property owners. Annual tax revenue, property values, and delinquency rates on property tax collection are critical factors that help determine what the taxation rate will be for each tax year. LaBrae Local Schools will continue to manage this revenue in an efficient and responsible manner, and with a keen sense of awareness of returning to our constituents every dollar possible.
Should you have questions regarding the information herein, please do not hesitate to contact the Superintendent or Treasurer at 330.898.0800.
Ohio has been experimenting with the charter school and "ed choice" movement for the last 17 years. The charter school movement was designed to provide parents with choices in the education of their child rather than being "locked into" the public school in the area in which the parents reside. The movement was also intended to create a competitive environment thus prompting traditional public schools to improve or suffer the consequences of losing students to privately owned charter schools.
LaBrae loses approximately 4% of its student population per year to charter schools. Thankfully, a preponderance of our families understand the value of the education offered by LaBrae Local Schools. Financially, the loss of students results in a significant loss of state and local revenue each year. The State deducts for each student leaving LaBrae for a charter school more money than the State pays LaBrae for each student remaining in the district (See the Parent Flyer Below). Since 2000, LaBrae Local Schools has lost $5.2 million dollars in state and local funding, which has been diverted to inferior charter schools(See Charter Invoice Below).
Statewide, Ohio is deducting nearly a billion dollars a year from traditional public schools and transferring this money to charter schools, which in theory, create a competitive alternative to public schools, and thus, giving parents more choices. However, in reality, the track record of charter school performance in Ohio is very poor. Ohio's charter history is laced with rampant fraud and profiteering in an environment with few substantial regulations, and all at the expense of diminishing the education of students remaining in the public schools. While there are some charter schools that are exemplary, such exemplars represent the minority. Extremely poor Ohio report card grades measuring the charter industry's lack of success with student achievement is the norm. In short, charter academic performance falls miserably short of the success in traditional public schools across the state of Ohio. To compare charter performance to the performance of traditional public schools, please visit Know Your Charter
In an effort to heighten awareness and more actively advocate for students, the LaBrae Board of Education passed a resolution at its December meeting, authorizing the school treasurer to invoice the State of Ohio for this lost revenue. Additionally, the Board of Education has recommended alternative methods of funding charter schools to the Ohio General Assembly and the Governor. Generally, the angst with charter schools is that charters receive taxpayer money, as do public schools, but these privately owned schools are not held to the same accountability standards as public schools. Allowing taxpayer money to continue to be funneled to such a troubled educational institution defies logic. Ohio taxpayers should be outraged at the waste and fraud prevalent in Ohio's charter school industry and the continued squandering of precious tax dollars.
LaBrae Local Schools truly appreciates our supportive community. We value the trust you have placed in our staff to care for, and educate, your children. Below additional information relative to charter schools is provided to help you become more informed about this issue. It is our hope that we can continue to count on your support and count on you to be a positive voice not only for LaBrae, but for public education throughout Ohio.
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The Ohio Department of Education recently conducted a staffing analysis of the LaBrae Local Schools from FY2012, or fiscal year 2012, which represents the 2011-2012 school year. The analysis is an examination of the number of employees for LaBrae Local Schools in particular classifications and how these staffing levels compare to similar districts, which are school districts indentified as similar by having, among other things, similar student enrollment numbers, community demographics and property valuations. In all, there were 20 public school districts in the comparison pool. For example, districts in the comparison pool from Northeast Ohio that might be familiar with most people include Conneaut, Grand Valley and Brookfield.
One component of this examination is per pupil spending. However, spending figures in the analysis are from FY2011, because FY2012 expenditures totals were not available at the time of the analysis. Figure 1 below is a summary of LaBrae’s EPP, or expenditures per pupil, compared to similar districts and public schools throughout Ohio.
LaBrae EPP FY2007-FY2011
As one examines this chart, one can see that LaBrae’s spending per pupil, which is the sum of all expenditures divided by the number of students enrolled, only increased $270 over five years, or a 2.7% increase in spending. From the perspective of spending increases on an annual basis as opposed to a cumulative five year period, it is worth noting that from FY2007-FY2011, spending increased at an annual rate of .54% per year. Additionally, one should be aware that spending increased in FY2008 and FY2009 due to increased revenues from federal stimulus programs. As those revenues ceased, the expenditures associated with the increased revenue were eliminated as well.
Moreover, this chart also demonstrates that LaBrae’s expenditure growth was significantly less than those districts in our comparison pool, in which spending increases were 8.7% over five years, and significantly less than the average growth in spending among all public school districts in Ohio, where spending increased 10.3% on average.
During the 2011-2012 school year, LaBrae employed 12.5 teachers above the state minimum required staffing levels. Teachers who are employed in programs funded by federally funds are prohibited by law from being factored into this count. When comparing teachers employed from the LaBrae’s general fund, which is funded from local tax revenue and state revenue, LaBrae employs 10 less teachers than those school districts in the comparison pool.
Furthermore, the average salary for one full-time regular teacher employed at LaBrae in FY2012 was $55,777. In FY2008, the average salary for a full-time teacher at LaBrae was $53,470. Thus, in four years the average salary has increased, $2,307, or a 4.1% increase. This very modest increase is due to factors such as more expensive retiring teachers being replaced with less expensive teachers, co-operation between management and labor to keep wage increases within the district means and more teachers receiving increases in pay due to moving to higher experience steps on the negotiated pay scale.
The State of Ohio requires districts to employ Educational Service Personnel at a rate of 5 employees per 1,000 students. These positions include positions such as a librarian, music teachers, family & consumer science teachers, and art teachers. LaBrae is required by Ohio to employ 6.5 of these types of employees. Currently, LaBrae employs 8.5, which is lower than similar districts which averaged 11.2 educational service personnel employed.
The following chart provides a summary of other job classifications within a school setting and compares LaBrae’s staffing levels to the similar district pool to which LaBrae was compared. The numbers in Figure 2 represent the number of FTE employed, which stands for Full-Time Equivalency.
LaBrae FY2012 Staff v. Similar Districts
It is easy to see that in practically every area of job classification, LaBrae is staffed at a lower level than its peers. This is evidence of how LaBrae has worked diligently to manage its available revenue and spend money within these limits. It is well known that in any organization, whether private sector or public sector, that the most expensive expenditure in the cost of doing business is labor expenses. Keeping these costs at a manageable level is not an easy task. Moreover, school districts across the state have seen significant cuts in financial support from the State of Ohio. LaBrae has successfully managed to contain labor costs due to the positive partnership that exists between management and the collective bargaining units representing our certified staff and our classified staff. Collectively, everyone has maintained practical expectations and understands the financial dynamics of public school districts.
The Board of Education and the employees of LaBrae Local Schools will continue to work diligently to provide the best educational and support services for our students and community. We will continue to honor the trust our taxpayers place upon us with respect to the adversity that all public schools are enduring in this environment.
Should you have any questions regarding the staffing analysis, please contact the Office of the Superintendent at 330.898.1393.
Recently, the Tribune Chronicle ran an editorial on tax data and local public schools. The editorial is attached for your review. The editorial makes use of tax data that the Tribune gathered and shared with its readers. Additionally, the editorial makes assumptions, using the data, that do not provide readers with complete information from which to form their opinion. As a result, LaBrae Local Schools offers some additional information for consideration for our community members.
First, the Tribune recently researched the tax records of one home in each of the 20 public school districts in Trumbull County. The conclusion of their research was to suggest that property taxes in the county have increased by an average of 71% over the last 20 years. Without a doubt, it is useless to argue that property taxes have not increased in 20 years. However, it noteworthy that statistical researchers might argue that 20 pieces of property among thousands of pieces of property county-wide does not constitute statistical validity for determining averages for tax increases. This is the equivalent of polling one person in each district to determine for whom they would vote for president, and trying to use this statistical sample as a representation for how the entire county would vote for president. Simply, the sample isn't large enough to determine a valid average.
Additionally, the Tribune cited that while property taxes have gone up 71%, the Consumer Price Index, or C.P.I., a Bureau of Labor Statistics indicator for measuring inflation on typical consumer items, had only increased 57% over the same 20 year period, and that median household income in the county increased comparably by 42%, both of which are valid percentages. On the other hand, the Tribune fails to mention that the C.P.I., and the manner in which it is calculated, has previously been changed by the government, the latest alteration coming in 1999. The government made the changes so as to truly reflect the average price increases facing consumers throughout the country. Some critics argue that this change was a purposeful manipulation by the federal government so the C.P.I. would calculate to a lower percentage than in prior years.
Why is this important? Many of the government entitlement programs, such as Social Security, Medicare and Medicaid, as well as tax exemptions and deductions are indexed to inflation. Annually, the government allows for increases in payments to citizens, or an increase in a tax deduction, such as the one given to families for dependent children, and these increases occur at the rate of inflation, as measured by the C.P.I. Therein lies the importance, with a lower Consumer Price Index, any government payouts to citizens indexed to the C.P.I., become lower than previous years when the C.P.I. was calculated at a higher rate. Likewise, when deductions and exemptions are indexed to a lower C.P.I., this doesn't allow taxpayers to "write-off" as much, which subjects a greater portion of their income to taxation than would have occured under the previous manner in which the C.P.I. was determined. In essence, many critics believe that the purposeful recalculation of inflation via a revised C.P.I., was an intricate budget trick by the federal government, used to decrease government payouts in the entitlement programs and to increase government revenue through the C.P.I.'s impact on tax collection in the form of smaller exemption and deduction allowances. The Tribune would have you conclude that property tax growth far outpaced the rate of inflation. However, considering the changes in the calculation to the C.P.I., such a conclusion might be considered faulty.
Another assertion the Tribune claims in this editorial is that high taxes are not necessary in order to "produce" quality students. The editorial identified McDonald, Warren, Hubbard, Niles and LaBrae as school districts with the highest tax rates in the county. The Tribune identifies Newton Falls, Badger, Champion, Lordstown and Howland as the school districts in the county with the lowest tax rates. Collectively, the districts mentioned in the editorial with higher tax rates, are not rated as high on the 2011 Ohio Report Card as the districts with lower taxes. While this is accurate, this information alone does not tell the entire story. The editorial fails to inform the voter that each of the districts listed as having the highest tax rates all underwent exstensive construction programs within the last 10 years and have bond issues from which they are still collecting. Among the districts with the lowest tax rates, only Newton Falls and Badger have undergone construction projects funded through bond issues passed by the voters. Simply, the bond issues skew the tax rates. Not all of the revenue generated from taxes is used directly for the purpose of educating children. While new or remodeled buildings do not determine the quality of students "produced", they directly impact the learning environment and afford districts the opportunity to be more cost effective with facility maintenance programs.
Most importantly, the Tribune fails to bring to light the fact that the tax base in Trumbull County has drastically changed as the economy of the County has evolved over the last 20 plus years. While millions in tax dollars have been lost due to the diminished auto and steel industries in the region, school districts have been given a clear message from Columbus, that to make up for the lost dollars, the district must go to their local supporters, you the taxpayer. In the last 10 years, the State has increased funding for public education, however, the increases have disproportionately gone to charter schools. Charter schools are funded to the tune of $771 million in fiscal year 2012, which is July 1, 2011 through June 30, 2012. While the argument can be made, and it is a valid argument, that districts need to be extremely mindful not to fret away taxpayer money, the lack of a sound school funding formula hurts school districts and the taxpayers they serve. This political fact has forced districts to periodically return to taxpayers for additional support through property taxes, despite the Ohio Supreme Courts' ruling that the over-reliance on property taxes to fund Ohio schools is unconstitutional.
Another important area of consideration is the manner in which the Tribune would like to compare schools. Rather than compare schools in this editorial by just looking at their tax rates, a more accurate framework is provided when more relative data is used. For instance, the Tribune blatantly ignores the fact that higher tax rates are more directly linked to property valuations. In short, districts with lower property valuations need higher tax rates to collect the same amount of money as a district with higer property values and lower tax rates. For example, LaBrae has a per pupil property value of $78,618.70. Thus one mill of taxation on this value generates $78.62 of revenue per pupil. This contrasts sharply with our neighbor Champion, which has a per pupil property value of $110,449.77, from which one mill of taxation will generate $110.45 of revenue per pupil. Hence, LaBrae has to have a higher tax rate to be able to generate one dollar of revenue when compared to the tax rate that Champion has to enact. Please reference the attached document for property values and revenues of the districts mentioned in the editorial to illustrate this point and further details. Furthermore, it would have been better for the Tribune to provide their readers with additional information, such as the aforementioned, and other relevant data to better reflect the state of public school revenue and spending in Trumbull County, rather than just stating property taxes are too high.
The purpose of this essay is not to refute the Tribune's claims as incorrect. Rather, the purpose is to suggest that the editorial was less than authentic in providing the most complete picture. LaBrae Local Schools is committed to providing our community with information that is accurate and unglossed so that our community members can arrive at their own conclusions. We recognize that the over-reliance on property taxes has placed the local taxpayer at a disadvantage with the numerous requests for revenue made by local governments. Thus, the Board of Education and administration of LaBrae Local Schools takes very seriously its responsibility in being good stewards of our community's tax dollars, as we work to provide the best educational services our community can afford. Should you have questions regarding this issue, please feel free to contact the Superintendent's Office for further information at 330.898.1393.
In the past year, Trumbull County conducted property valuation updates on all real property throughout the county. These reevaluations are conducted every three years. In 2011, the trend across much of the region is one where the general state of the economy has contributed to depreciating property values. One would think that if property values are decreasing that taxes would decrease also. While this is a logical conclusion, it is not reality due to the complex nature of Ohio property tax law.
In Ohio, property tax rates are adjusted annually so that the tax rates always generate the same dollar amount as the day the levy took effect. House Bill 920, passed in 1976, is largely responsible for this structure. When property values increase, tax rates are adjusted downward, and when property values decrease, tax rates are adjusted upward. For further details on Ohio property taxes and House Bill 920, please read the attached PDF.