Here’s What It Would Cost to Give Wake Schools What They Want | News
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Monday, April 16, 2018

Here’s What It Would Cost to Give Wake Schools What They Want

Posted by on Mon, Apr 16, 2018 at 9:37 AM

This post is excerpted from the INDY’s morning newsletter, Primer. To read this morning’s edition in full, click here.

On Wednesday, I mentioned that the acting superintendent of the Wake County Public Schools System had proposed seeking nearly $490 million in funds from the Board of Commissioners, which would include nearly $59 million in new funding—far and away a record amount. As Commissioner John Burns put it, the ask was “timed well”: many of the county commissioners are in difficult primary fights with the key battleground being their vote last year to give the school system $21 million of the $45 million in new funding that it had requested. So last week, I set out to determine exactly what that fulfilling that request—which the schools advocates who are challenging the incumbent commissioners presumably would like to see—would mean for the county and its taxpayers. Johnna Rogers, the county’s chief operating officer, was very helpful in walking me through the process. Here’s a very brief rundown of what I’ve learned (warning: math ahead):
  • This year, without a tax increase, the county anticipates taking in $32 million in new revenue from growth and rising property values and things like that. However, about $10 million of that is already set aside for debt service. So that leaves $22 million. But the school board isn’t the only county agency that wants a piece of that pie. Agencies that deal with public health and county operations need to expand to keep up with growth as well, which will come close to eating up that $22 million.
  • In its budget planning this year, the county was banking on a $29 million request from the school board. With that, the county's budget staff projected a $27 million shortfall, meaning another tax increase. But that $29 million increase would be enough to return Wake County to its highest inflation-adjusted per-pupil spending level. The acting superintendent’s proposed request, however, is double that.
  • A quick note about property taxes: taxes are calculated in terms of pennies. The current tax rate in Wake County is 61.5 cents. Each cent works out to $10 of annual tax for every $100,000 of assessed value. So the average Wake County home—$273,000—pays about $1,679 in property taxes per year. For the county, each additional penny means about $15 million in revenue, give or take (I’m oversimplifying a bit here). So to fully fund a $59 million request, the county would have to raise taxes 3.6 cents, to 65.1 cents. Thus, that hypothetical average homeowner’s bill would go up to $1,777, more or less a hundred-dollar increase.
  • But that’s not all. The county also wants to place on the November ballot a badly needed school-construction bond referendum worth about $1 billion. Rogers estimates that paying for that bond would require another 2.5–3 cents in additional taxes, now driving the rate up to as much as 68.1 cents. Now that average homeowner just saw his tax bill jump to $1,859, $180 more than where we started. (This wouldn’t begin until the next fiscal year, so there would be some breathing room.)
  • And because the school system isn’t the only thing that needs cash in a growing county, we might not be done yet. The Board of Commissioners is also weighing bond referenda for Wake Tech and greenways. Together, all three bonds could force tax hikes of up to 4 cents, to 69.1 cents. Now that homeowner’s annual property tax is $1,886, up $207 from where we began. And, of course, it’s entirely possible—almost certain, in fact—that the school board comes back next year, and the year after, and the year after that, asking for more money. It’s not the school board’s fault. The state, which is tasked with funding public schools, has almost criminally neglected its duties in recent years and left counties to pick up the slack. (This is not unintentional, by the way.)

WHAT IT MEANS: I write all of this not as a judgment on what the county should do, just as a statement of the realities of the thing. Still, even if Wake’s tax rate shot up to 69.1 percent, it would be far lower than Mecklenburg’s (81.5 cents) or Durham’s (76.8 cents). Add in the fact that the city of Raleigh levies pretty low taxes too, and there seems to be some room to grow, especially to keep up with the crushing growth and overwhelming needs. On the other hand, that’s not to say that the Board of Commissioners hasn’t been increasing funding. It has—for four consecutive years, and probably again this year, no matter how you slice it. And Wake now has the highest average teacher supplement in the state, and that’s not nothing. The question animating this election, though, is whether it’s been enough.

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