Nov. 9, 2019
I was pleasantly surprised to learn that, according to Medina County Auditor Mike Kovack, it appears Cloverleaf's year-one proceeds from the NEXUS pipeline will be $7.4 million, not the $5.4 million that was originally forecast by Public Finance Resources Inc. more than three years ago. Having heard from several employees and community residents, there is some confusion associated with this particular sentence from Auditor Kovack that appeared in a recent press release:
"Between the reappraisal and the new NEXUS values, it is highly likely that we [the auditor's office] will be reducing at least the emergency levies for the Cloverleaf Local School District prior to next year's tax bills."
The auditor’s quote is correct. However, people have asked me if this means the pipeline money will merely take the place of levies that we currently have on the books. The short answer is “no” due to emergency levies being fixed-sum levies. To better explain the context of his quote in terms of school funding, I will use an analogy:
You are having a cookout and decide to invite nine friends. While planning the cookout, you and your friends think it would be fun to hire a DJ at a price of $100. Since 10 of you are attending the cookout, there is an understanding that all 10 of you will chip in $10 each to pay for the DJ.
$100 for the DJ / 10 people = $10 each
A few weeks later, you and your friends are reminiscing about the great time you had and decide to plan another cookout with the same $100 DJ. This time, you want to invite two more friends to the cookout. Since 12 of you are now attending the cookout and the DJ still costs $100, each of you will now pay less per person for the DJ.
$100 for the DJ / 12 people = $8.33 each
In the example above, the original cookout guests are our taxpayers, the DJ is an emergency levy, and NEXUS represents the additional guests you want to invite to the second cookout. Since emergency levies are also known as "fixed dollar" levies, the amount of money the levy generates is "fixed" or stays the same as the day it is voted in. If an emergency levy generated $1 million in 1995, it also generates $1 million in 2019 -- even though there may have been fewer taxpayers (people at the cookout) in 1995 than there are today. As a result, more people are paying the cost of the emergency or "fixed dollar" levy today than in 1995. As suggested in the analogy, with more people invited to the cookout, each person pays slightly less for the DJ (emergency levy).
When the auditor says, "… it is highly likely that we will be reducing at least the emergency levies for the Cloverleaf Local School District …,” he means the auditor’s office will reduce the millage of emergency levies to account for the additional guests (NEXUS). How much less isn't determined until the auditor certifies the levies and lowers the millage that will be charged. Because of NEXUS, people at our cookout (Cloverleaf taxpayers), on average, will pay less for emergency levies!
Now, the question on the hearts and minds of our Cloverleaf residents: “What will Cloverleaf do with this new revenue?” To that end, the board of education contracted with a company to survey a representative sampling of our district residents. (I have previously written about this.) Those survey results are now in. I will update you with those results after the board reviews them later this month.
Until next time … Go Colts!