By: Guest Writer, Melissa Klinger, Mountain Home, Arkansas
I am following the Highland School District millage election with intense interest, even though Iam not a citizen of your community. You see, our community, Mountain Home, is enduring the same thing- a failed millage election last August, and it now appears, a second upcoming millage election in May. The similarities in tactics and strategies by the school districts are eerie. They include using special election dates to lower voter turnout, using the children for emotional manipulation of the public, a lack of transparency by school boards and administrators, limited opportunity for public comment, no concern about increasing school debt, and a very concerning statement in the ballot language. This statement be-came a contested point as well, in our district’s campaign last August. Our ballot language stated, “The surplus revenues produced each year by the debt service millage maybe used by the District for other school purposes.” Highland School District administration has told your community through videos and multiple published comments that this language is required by law. It is not. Highland School officials may simply be restating what has been explained to them by the bond attorney’s without researching it for themselves, but the law does not require this wording on a millage ballot. Arkansas Code 26-80-106 reads, “Because of consolidations of school districts and for other reasons, the debt service millage voted by a school district for the payment of its outstanding indebtedness frequently provided a substantial surplus over the amount of the annual principal and interest requirements. This surplus may be used by the district for the purpose of paying the principal and interest of subsequent indebtedness incurred by it and may be pledged for that purpose or any other school purpose, provided that the district is in compliance with the uniform rate of tax.” [Emphasis added] It is important to note that the law permits school districts to use the substantial surplus for other purposes, but it does not require it and the language is not mandated by law. Last August, members of our community questioned our super-intendent about this language, and he said he did not think Stephens Bank, the financial advisor, would remove this language from our ballot. His comment gave me a lot to reflect on. Why does a bank have the ultimate authority on how tax-payer money is allocated within a school district and why would they be adamant about keeping that language on a ballot? So, I started digging. Since last September, through many phone calls and some Freedom of Information Act requests, I’ve pulled together some information that citizens of Highland School District might find beneficial. This information has been gleaned from calls and documents from the county clerk’s office, the Arkansas Department of Education, The Arkansas Attorney General’s Office, the Arkansas Elections Commission, Arkansas Secretary of State, Arkansas Ethics Commission, the Arkansas Securities Department, and from our local school district. It was stated implicitly by an attorney at the Arkansas Securities Department, that the bond attorneys draft the language that is placed on the ballot, and the state does not govern that language. It only requires that the “district is in compliance with the uniform rate of tax.” (Arkansas Code 26-80-106). The Uniform Rate of Tax for the entire state is 25 mills and no school district can have a millage rate less than that by Arkansas law. Everything else is up to the taxpayers within that district, until the millage becomes security for a bond, then taxpayers cannot reverse the millage. In a Jan. 5 school board meeting in Mountain Home, our school superintendent made a comment in his presentation to the board. He stated, “I do think that it’s worthy of us modifying our ballot language to give the patrons, you know, a tighter contract. And by a tighter contract, I mean, this money will go back to the payment of these liens or to the maintenance and upkeep of these facilities. Yeah. So, and I have talked to the bond attorneys and they, although nobody’s done it, they say that is something that can be done, and I don’t think it pins us. Us as in Mountain Home School Board. Mountain Home Public Schools in a bad position because we will. We will. Most years it’s been 1.8 mil-lion on maintenance and upkeep of everything we have. You following me?” (This statement can be heard at about 1:07:25 on the January 5,2023 audio recording of the meeting posted on the school board’s webpage athttps://www.mhbomb-ers.com/page/school-board-infor-mation.The financial advisor for the bonds is making this determination on the ballot language, and hopefully, because of public pressure here, at least that portion may be changed. Although the bond attorney maybe willing to change this specific portion of the ballot language, I personally do not believe that is enough. After digging through sample ballots provided by multiple agencies, I have noticed a significant change in the ballot language for school millage elections over the last two decades. Millage ballots used to contain language that allocated a portion of the mills toward Maintenance and Operations, a portion toward Capital Outlay, and a portion to-ward Debt Service. Even older ballots had a category of Dedicated Maintenance and Operations. Newer millage ballots, at least in our school district, place all mills in one of two categories – the Uniform Rate of Tax (M & O) and Debt Service. However, the language on the ballot has allowed school districts to use the substantial surplus generated from the mills completely at their own discretion, and as a result, the debt is not declining and they do not have adequate reserves to meet maintenance needs, much less new construction needs. So why would a financial advisor care about that specific phrasing on the ballot? Because it incentivizes excess spending. It grows the school’s annual budget substantially over time. School administrators become addicted to the excess money and realize they have an ever-increasing supply of revenue, so they don’t have to tighten their purses or make hard decisions about their money like the rest of us do. Proponents for our school’s millage increase tried to argue the school is on a fixed income. Folks, that is not correct. Our district still draws revenue from mills that were passed in 1989 for a building project, though that construction project has long been paid for. Since 1989,the county’s assessment of property has increased exponentially through increased property values and new residential and commercial construction. Oh, and don’t forget the mills also apply to personal property such as vehicles. How much was a house or car in1989 versus their cost today? And that continually climbing value just builds more and more revenue for the schools. Please don’t let them convince you it’s for the kids. It’s about the money and the hundreds of mil-lions of dollars in interest income these bond underwriters earn. Our schools should be setting an example of fiscal responsibility and financial literacy for our kids and teaching them how money works and what indebtedness costs overtime. They should be teaching them how taxes and compounding interest work, so the kids are better equipped to manage their own finances. The schools should also be concerned about the growing debt burden they are leaving for our kids to carry in the future, and how much money will flow out of our communities through interest payments on the bonds. However, that does not appear to enter into these schools’ deliberations at all. As one of Mountain Home’s school board members said during a recent session, “I don’t think people have a problem right now with the 6.87 [mills]. So, to say that’s going to go to 2053. It ain’t gonna bother me. I ain’t gonna be here. It ain’t gonna bother probably 75 percent of the people voting. They’re not going to be here. ”No, sir, you might not be here, but our kids, grandkids, nieces, and nephews will, and they andour community deserve to have someone fighting for their future rather than selling them out.
Sources:
https://law.justia.com/codes/arkansas/2020/title-26/subti-tle-6/chapter-80/subchapter-1/sec-tion-26-80-106/
https://www.mhbombers.com/page/
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