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After seven hard years on the Wake County Board of Education, not much surprises Beverley Clark, or angers her either, for that matter.

Breaking point 

Wake's growth wars are pulling the school system apartand could bring it crashing down.

Wake County School Board member Beverley Clark listening to a budget debate on Feb. 20.

Photo by Derek Anderson

Wake County School Board member Beverley Clark listening to a budget debate on Feb. 20.

After seven hard years on the Wake County Board of Education, not much surprises Beverley Clark, or angers her either, for that matter. Still, when a reporter called her on a Saturday night in January to say that the Wake County Commissioners, fresh from a retreat, wanted to put another $1 billion school construction bond issue on the ballot in October, on top of the $970 million bond that had just passed, she was staggered. "I absolutely was," Clark says. "I was totally blown away. I had no idea it was coming, because—there hadn't been any communication, and I don't understand, we've really been working together...."

But Clark's not sure how much more she wants to say, or how directly she wants to condemn what the commissioners did. Following a year of unusually good relations between her board and theirs, marked by no fights in the press and a shared campaign that got that first bond issue passed, all of a sudden the commissioners were going their own way and trying to make the school board look bad. Or so it seemed.

"The other day," Clark begins again, "a neighbor of mine said to me, 'I've been a Republican since 1978, and I can't stand what the Republicans are doing to our schools.' And I have heard that many times in the last few weeks."

Republicans. Democrats. They're at war over the schools—again. And if it seems like déjà vu and shades of the '90s, when Republican-led commissioners slashed taxes and schools and Democrats howled, it is and it isn't.

This time, it's Democrats and Republicans on the school board (a non-partisan body, by the way) who are trying to hold the line on property taxes, or at least restrain them, by using more year-round schools, and lobbying hard for impact fees on developers and transfer taxes on real-estate sales.

And led by Clark, they're also saying that unless such "alternative" revenue sources are created—and impact fees and transfer taxes both would need the General Assembly's OK along with the commissioners'—Wake County will either have to ratchet down its dizzying growth rate or else risk a taxpayers' revolt that could bring the schools, and growth itself, to their knees.

Meanwhile, the Republicans on the county commission like the growth, don't like impact fees, oppose mandatory year-round schools, and otherwise seem to be split two ways, or three, or—well, there's four of them, compared to three Democrats.

How high are the Republicans willing to raise property taxes? Are they really against charging developers for growth? Or is their game to put up bond issues they know can't pass? And, in doing so, try to break up the Wake school system, which with 128,000 students is the nation's 21st largest?

And what about the Coble factor? Affable Republican Commissioner Herb Council leaves office, Republican Paul Coble, the partisan ex-Raleigh mayor, wins his seat in November, and the change in the atmosphere is palpable. Is Coble the reason why last year's rosy relations have gotten so thorny?

In a word, yes. He's one reason.

Will there be another $1 billion bond this year?

Doubtful.

But stay tuned. There is a school board election coming in 2007, bond issue or not. And for better or worse, Wake County's schools are at the breaking point.

Deal breaker

It's not immediately obvious, perhaps, why the Republicans' proposal to put another $1 billion in the school board's hands should be considered an anti-schools move. One reason: The $970 million bond vote was far from overwhelming—53 percent for, 47 percent against—and almost nobody thinks the voters will OK another one 11 months later, especially if it'll drive up property taxes by as much or more than last year's 4-5 cents (about $90 on a $200,000 home).

To Democratic County Commissioner Betty Lou Ward, the whole thing sounds suspiciously like what happened when the voters rejected the 1999 bond issue. "I don't want to set us up for another failed bond issue," Ward said recently, "because if we do, everybody loses."

The second reason is more complicated, and has to do with the issue of mandatory (assigned) year-round schools.

When the '99 bond issue failed—and it was a $938 million bust—it put the school board in a deep hole as far as school capacity was concerned. They were already behind, and smaller bonds that the voters approved in 2000 and 2003 didn't really catch things up, because no sooner were they passed than Wake County's growth rate exploded upward:

  Students Increase New Schools
2000 97,853 2,835 7
2001 101,397 3,544 0
2002 104,373 2,976 3
2003 108,970 4,597 4
2004 114,068 5,098 7
2005 120,504 6,436 5
2006 128,072 7,568 5

The failure of the '99 bond issue showed up in 2001, when schools that would've been built weren't—and didn't open.

Wake schools' space crunch has forced kids into 1,100 mobile classroom trailers, including the ones that comprise River Bend Modular Elementary School in North Raleigh. - PHOTO BY DEREK ANDERSON
  • Photo by Derek Anderson
  • Wake schools' space crunch has forced kids into 1,100 mobile classroom trailers, including the ones that comprise River Bend Modular Elementary School in North Raleigh.

From a steady pace of about 3,000 new students a year in the '90s, Wake's enrollments broke loose. The district expects 8,000 more next year. What happened? "They cut the ribbon on I-540," Clark says.

Already 18,000 seats short at the start of the current school year, and using 1,100 mobile classrooms, or "trailers," the school board projected that it would have to find room for another 40,000 students by 2010—or a total of 58,000 seats—and 120,000 by 2030. That's where mandatory year-round schools came in.

Year-round schools are big money savers compared to traditional-calendar schools because they're used 12 months a year, not just nine. Up to now, Wake has used year-rounds sparingly, and only for kids who applied to be in them. But to maintain that go-easy policy in the face of roaring enrollments, the board determined that it would need a $2 billion bond issue in 2006, which it considered a political non-starter (particularly with Commissioners' Chair Tony Gurley telling folks that year-round schools should be the "default" option, not the exception).

Ultimately, the school board and the Wake Commissioners agreed on a plan to convert 19 existing elementary schools and three middle schools from traditional to year-round status, and to make every new K-8 school year-round through 2015. That meant thousands of kids would be assigned to year-rounds for the first time ever, with the caveat that if their parents had a big problem with it, they could apply for any available school space in a nearby traditional-calendar school. Most of them, the school board thought, would be accommodated, though not all. (That process is under way now.)

The savings went right to the bottom line: With the year-rounds, and trailers, a $970 million bond issue would be enough to handle all the kids through 2010 or '11, and in the meantime another bond would be put before the voters in 2008 or '09, and then another soon after that, until the whole 10-year, $5 billion construction plan was finished.

So the two boards agreed, although several of the Wake commissioners, Democrats as well as Republicans, said they intended to do whatever they could to avoid having kids forced to go to year-rounds against their parents' will.

But in fast-growing Apex, in southwestern Wake, whatever they could do wasn't much. The population there has quintupled in a decade, to about 25,000, and the number of schools just hasn't kept pace. So the only way the school board could reckon to house all the kids—without busing some of them to schools east of Apex, and then busing kids from those schools to other ones, and so on in a chain reaction all the way to Wake Forest—was to convert the elementary schools in Apex to year-round.

That sent Apex parents into open revolt. So last month, the commissioners—at Coble's instigation and on a party-line, 4-3 vote—decided to withhold from the school board the $4.7 million it said was needed to complete all 22 conversions. In short, the Republicans tore up the deal.

Republicans Tony Gurley, the Wake commissioners' chair, and Paul Coble, the vice chair, at a meeting Feb. 19. The GOP majority pitched the idea of another school bond referendum in October, when school board elections are scheduled. - PHOTO BY DEREK ANDERSON
  • Photo by Derek Anderson
  • Republicans Tony Gurley, the Wake commissioners' chair, and Paul Coble, the vice chair, at a meeting Feb. 19. The GOP majority pitched the idea of another school bond referendum in October, when school board elections are scheduled.

Commissioners Chair Gurley says he'd be satisfied if the board cut the 22 elementary conversions to 20—eliminating two elementary schools in Apex. But the board refused, and dipped into its reserve accounts for the money.

Then Gurley, Coble and their fellow Republicans Joe Bryan and Kenn Gardner dropped the other shoe, which was to push the next bond up to 2007. The commissioners can't propose a bond themselves, however. So they wrote a letter to the school board suggesting that if it brought one forward, they'd approve it and put it on the ballot, up to $1 billion.

So this was the second reason commissioners proposed the bonds: They certainly appeared to be coming to the rescue of both Apex and the school board, offering more money in a pinch. And if the school board said no, fearing voter rejection? Then they'd be to blame for the forced conversions—and five of them are up for re-election this year.

The only problem was, schools built with money from a 2007 bond wouldn't open until 2009 at the earliest, and more likely 2010, according to school officials. And there's no way to speed that up unless you already own the land, and Wake doesn't.

What's more, School Board Chair Patti Head emphasized, the deal was that every new school (except high schools) was supposed to be year-round through 2015. Unless the commissioners wanted to throw that part out, too, nothing would be gained by holding the next bond issue a year or two sooner. And if they did, the price tag for keeping a traditional calendar wouldn't be cheap—about $430 million.

Head, a registered Republican, said the board was open to it if the commissioners were—the year-round schools were never the board's preference, she said.

But regardless of that, the board said, nothing could be done to avoid the mandatory year-round assignments in Apex starting this July 2007.

Nothing?

Break it down?

One school board member thinks something can be done to help Apex. He's Ron Margiotta, the board's most conservative member and, no surprise, the one whose district includes Apex. Margiotta has aligned himself with the Republican commissioners, urging his colleagues to drop the conversions and instead of using year-rounds to create space, simply pack more kids into every school and class.

This is the same position taken by Apex parents in anti-conversion groups like WakeCARES and Stop Mandatory Year-Round (SMYR), who say there's plenty of space if every school in Wake County housed as many students as it ever did.

But Margiotta goes further. It's time to break up the Wake district, he says. "We want out. Apex wants out, Holly Springs wants out, Garner wants out—the system's too big, so we're always stuck at a policy level, and never can get down to the individual [student]."

Margiotta opposed the '06 bond, joining the campaign against it led by a group called Americans for Prosperity-North Carolina, part of Raleigh conservative Art Pope's empire.

Americans for Prosperity, a nonprofit advocacy organization, is headquartered in Washington. Pope, the wealthy head of Variety Wholesalers, his family's chain of dollar stores, is one of AFP's three national directors and the only one who also serves as a director of its foundation, which is chaired by libertarian business mogul David Koch. And, thanks to Pope, North Carolina is one of a handful of states with an active AFP chapter, led by Director Francis De Luca.

What's De Luca's take on the Wake schools? It's not that no tax increase is needed, ever. "Do they have enough money? The answer is yes," he says. "You could give the school board all the money they wanted, and they still wouldn't have enough."

(On the cover:) A group of second graders dig for rocks on a playground outside classroom trailers at Wakefield Elementary. The school was built in 1999 and reached capacity three years later. - PHOTO BY DEREK ANDERSON
  • Photo by Derek Anderson
  • (On the cover:) A group of second graders dig for rocks on a playground outside classroom trailers at Wakefield Elementary. The school was built in 1999 and reached capacity three years later.

De Luca, like a lot of Wake conservatives, is a big fan of charter schools, which are public schools that get operating support from the taxpayers but no buildings—once "chartered," volunteer boards have to raise money from private donors and recruit students.

"The charter school model is a great one," De Luca thinks, "because at the end of the day, if they're not satisfying their customers, they go out of business."

Eventually, De Luca says, he'd like to see the whole public school system fall of its own weight and be replaced by schools that are similarly market-driven, which would force them to run much leaner, he thinks, with smaller, plainer buildings, fewer frills and more efficiency. Why, for example, does the Wake system have its own buses? De Luca asks. Why doesn't it contract with Raleigh's CAT system, for example? And why doesn't it let developers build schools and see if they can do it quicker and cheaper?

De Luca's group is not, however, in favor of year-round schools as a cost-saver except if parents choose them. It recently announced that it was forming a watchdog group called Wake County Citizens for Quality Education and is asking parents to be on the lookout for waste. One of its members, Nikki Kunkel, a Raleigh mother of four Wake County school children, said she sees "wasted space all over the place" when she drops her kids at Brier Creek Elementary in North Raleigh. "We need simple, safe schools with a basic design. If we invest in simple, basic school construction, families won't be forced into disruptive calendar and lifestyle changes, and they won't be asked to give up even more of their hard earned money to fund fancy schools."

That had to be music to the ears of Art Pope, who's also a board member and helped start the conservative John Locke Foundation in Raleigh. John Locke's Web site features a "report" on school choice—public vouchers to pay for private schools—with this précis: "The one point upon which a great majority agree is that, despite substantial increases in funding, public education is not meeting the needs of students." Thus, "parental school choice" would be "a promising alternative to the educational status quo."

Coble's opposition to school taxes, meanwhile, goes back to his earliest days in politics as a leader of the conservative Wake Taxpayers Association. In the '06 election, while endorsing the bond issue, he said he was against raising property taxes to pay for it. He received $8,000 for his campaign from the Pope family, including the maximum $4,000 each from family patriarch John William Pope, who died in mid-August, and his wife, Joyce.

Taxpayer overload

Stan Norwalk's got a chart he likes to show off. It compares the bond issues the Wake school board's asked for over the years with what actually went on the ballot when the county commissioners—under conservative leadership—finished cutting them. The billion-dollar gap in between, plus the failure of the then-record $938 million bond in '99, is why Wake's so far in the hole today, Norwalk says, and why it will need another $4 billion to $5 billion over the next decade, on top of last year's $970 million, to keep up with the county's explosive growth.

Norwalk's a retired businessman who lives in Cary and helped start the citizens group called WakeUp! Wake County, like AFP a nonprofit advocacy group. He's now its vice chair and education team leader. (Full disclosure: I helped, too, with columns in this paper.)

And what does he think of the AFP critique? "It's part of a whole mindset that conservatives like Newt Gingrich and Grover Norquist [the anti-tax activist] have been pushing for 30 years, which is that big school systems must be bad because anything big is bad," Norwalk says. "The endpoint for them is vouchers and a market-driven system which means unequal education for all instead of what the state constitution provides, which is equal education for all."

But Wake's big system isn't bad, it's first-rate, Norwalk says, and keeping it that way is crucial to Wake County's ability to remain prosperous in the global and knowledge-based economy. Which means not putting kids in cinderblock buildings and not eliminating "frills" like band, foreign languages or Advanced Placement courses. As evidence, he points to the report of the commissioners' own Blue-Ribbon Committee on the Future of Wake County, the business-dominated group that last year called it "one of the best public school systems in the country, and plays a key role in this region's economic development efforts."

So where AFP sees a system that needs breaking down, WakeUp! worries that it will break if soaring student enrollments continue to push up property tax rates. Why? Because, Norwalk says, while some people benefit tremendously from growth and can afford to pay more for the new schools needed to keep it going, most Americans' incomes have been flat or worse in recent years after inflation. "There are a lot of people who are struggling, and they have excellent reasons for not wanting to pay more taxes."

What's more, Wake's growth is heavily residential (70 percent, according to the blue-ribbon committee) and even more heavily populated by families with school kids. (Wake accounted for 25 percent of North Carolina's population growth in 2000-2005, but 38 percent of its new K-12 students, Norwalk notes.) Commercial growth gives you taxes with no kids; houses, on average, pay less in taxes than their kids will cost.

A construction worker takes a break outside the former Winn-Dixie at U.S. 1 and N.C. 98, where Wakefield High School's ninth graders will go next year. New in 2000, Wakefield High can't handle northeast Wake's growth. - PHOTO BY DEREK ANDERSON
  • Photo by Derek Anderson
  • A construction worker takes a break outside the former Winn-Dixie at U.S. 1 and N.C. 98, where Wakefield High School's ninth graders will go next year. New in 2000, Wakefield High can't handle northeast Wake's growth.

Thus, not only is growth not paying for itself in terms of school taxes, the county's property tax rate is due to jump by at least 10 cents over the current 64-cent level (BRC's recommendation), or 20 cents (Coble's prediction in an interview with WRAL-TV), or even 60 cents (AFP's estimate of what a $5 billion building plan could do).

That just won't fly with voters, Norwalk thinks, especially when they know that the developers who are profiting most directly from the growth, and whose new houses are causing the need for new schools, aren't putting anything in the till for them.

Norwalk's not saying property taxes shouldn't rise. In fact, he's fond of pointing out that Wake's tax rate, thanks to Republican commissioners, is the lowest of any urban county in the state. What he's saying is, voters won't let them rise until the real estate industry comes to the table, too.

The WakeUp! plan:

  • A countywide impact fee for schools that would raise $50 million a year based on the 12,000 new homes built last year in Wake.

  • A transfer tax of 1 percent of all real estate sales, including land, commercial properties and existing home sales, which would bring in another $144 million from people who, with few exceptions, also are cashing in on growth.

That's roughly $200 million a year, Norwalk says, enough to support a $2 billion bond issue without increasing property taxes at all, Norwalk says. Based on the campaigning he did as part of the Friends of Wake County committee for the '06 bond issue, he thinks that's what it will take before voters will pass another one anytime soon. "This last one was hard-slogging all the way, even with a very well-run and well-funded campaign. I think the next one's got a good chance of failing, whether it's in 2007, '08 or '09."

Breaking out?

Last Monday, the school board voted unanimously—Margiotta, too—in favor of the "menu of options" bill in the General Assembly that would allow Wake to enact an impact fee, a transfer tax, or both. The idea of the "menu" is that if any county has it—and a few have one or the other—then every county would be free to choose it.

Whether that bill (H.R. 153 sponsored by Rep. Mickey Michaux, D-Durham) or one like it will pass is impossible to say this early in the session. The powerful Realtors' and homebuilders' lobbies, Nos. 1 and 4 on the list of PAC contributors to legislative candidates last term, are fiercely opposed, arguing that taxes on them will make housing less affordable for the buyers.

Michaux introduced his bill on behalf of the N.C. Association of County Commissioners, and in theory the Wake commissioners have endorsed it, too. But Gurley and Bryan have made it clear that, given the menu, they'd only be choosing a third item on it, which is a 1-cent sales tax increase (Mecklenburg County's got that one, and uses it for transit). They'd take it to the voters—a 1/2 cent for local roads, a 1/2 cent for schools—and let them decide.

Well, again, hard to tell so early on, but it sounds to Norwalk, who's been lobbying the General Assembly for WakeUP!, and to others as well, that Gov. Easley isn't going to part easily with that extra sales tax. His budget guru, Dan Gerlach, pointed out recently that the sales tax is the one state tax that's relatively low compared to other states. All together, state taxes are about equal to the national average, Gerlach said, while property taxes (local and county) are 35 percent less.

So if Wake can't get the sales tax and won't use impact or transfer taxes, then what?

Bryan, for one, wants to push forward with a 2007 bond. "It'll take bold leadership," he exclaimed, after his fellow Republicans started edging away from it at their Feb. 5 meeting. "We know we need to make this investment!"

On the other hand, Coble, after supporting the idea in January, conceded that any '07 bond was "probably doomed" when the Democrats started to challenge him on it.

For Beverley Clark, stalemate is not an option, because unless the county's growth is matched by growing revenues, the schools will suffer. Her solution: an Adequate Public Facilities ordinance, which mandates that new development can't occur unless the infrastructure needed to serve it—including schools—is in place. She has an ally in Raleigh City Councilor Russ Stephenson, an architect-town planner who's proposing that Raleigh start by asking—for the first time in any official way—whether schools are actually available when it considers subdivision approval and rezoning cases.

One big advantage of an APF, as it's called: Counties can use it without the General Assembly's OK. Essentially, they simply sign a paper, and ask municipal governments to sign it, too, that commits everybody to a set level of growth—2 percent a year, 3 percent a year—that's affordable under the current tax structure. Anybody who wants to go faster would then seek "voluntary" contributions from developers, as fast-growing counties in Virginia already do by law, Stephenson notes. In Isle of Wight County, Va., where he worked last year on a land-use plan, "voluntary cash proffers" by developers are running $19,000 a house to get their plans approved.

An APF will only work if the whole county's in on it, Clark says. On the other hand, county government has some leverage over the smaller municipalities, and Raleigh and Cary between them control the county's water supplies. So those three, working together, could make it go, they think.

"If you don't address growth in a holistic way," Clark says, "you're just pushing the bubble around the county. My idea is, we would agree to go forward with a measured step ... by looking first at what our resources are."

Either that or get more resources. "We consistently as board members hear that question from people: 'Why aren't you charging developers to pay for the schools?'"

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