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School Board Approves Cap for Tax Increase Referendum

by on December 16, 2013 11:55 PM

The State College Area School Board narrowed down the maximum amount it will ask taxpayers to sign-off on for improvements to the district's two high schools.

With a 6 to 3 vote, the board approved the $85 million cap for a proposed referendum tax increase. Vice President Amber Concepcion and board members Jim Pawelczyk and Laurel Zydney voted against the measure.

Voters within the school district will ultimately decide if the district can incur the debt for construction and renovations to the high schools.

Dorothea Stahl, a board member who supports the measure, said if the district limited the referendum to less than $85 million, officials could potentially face an incomplete project without sufficient funds to finish it.

"I don't want someone 30 years out saying that I was on a board that made a decision that shortchanged a project...and it didn't quite work because of a financial decision I made," she said.

David Hutchinson, another supporter of the measure, said it is critical that the district handle this project properly.

"The community is holding us responsible for getting this right. We only have one change to get this done," he said.

Pawelczyk said he believes the updates are necessary, the project is a "good solution" and setting the cap at $85 million gives the district more flexibility with the project.

However, he said he does not believe more than 50 percent of voters will support the referendum "and that's why I won't be voting for this motion."

Concepcion said the public would be more likely to support the proposed $75 million figure.

"I think this is really difficult decision to guess what people would support in May. I think a lower number would show we're asking for only what is most urgent. That being said I hope people will come out on May 20 and support this project...It's gotta get done," she said.

Board President Penni Fishbane noted that if voters approve the referendum that the $85 million is the maximum amount that would be collected and could be lowered in the future.

"This would be a maximum amount...this would be something that the board could at that time reduce, they could never go above that amount," she said.

The board is expected to vote on a final amount for the referendum at its Feb. 10 meeting. The board will vote on a final referendum question in March.

The question would then appear on the ballot during Primary Election on May 20, 2014.

The Centre County Board of Elections must approve the ballot question. The question cannot be longer than 75 words.

The total project cost is estimated at $115 million with a 5.3 percent interest rate and a term of 30 years. The district will take $10 million from a reserve fund to put toward the project.

Prior to Monday night's vote, the board looked at two amounts for tax increase referendum, $75 million and $85 million.

Under the $75 million proposal, the annual referendum tax increase for the average homeowner would be $25 in 2014-2015; $106 in 2015-2016; and $37 in 2016-2017.

Under the $85 million proposal, compared to the $75 million proposal, the rate would increase by $22 in 2016-2017 and continue to increase by $20 annually until the bonds are paid in full.

If voters approve the referendum, the related tax would remain in effect until the debt for the high school is paid in full, which is an estimated 30 years.

The referendum tax would show up as a separate line item on a taxpayer's bill and be in addition to the regular school district tax rate.

The board previously approved major renovations to the south building. That way all core classes can all be held on the same side of the street. Portions of the north building will still be available for student and community use.

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Jennifer Miller is a reporter for StateCollege.com. She has worked in journalism since 2005. She's covered news at the local, state and national level with an emphasis on crime and local government.
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