School funding disinformation
How to deceive without lying
Although the funding of the Ithaca City School District (ICSD) is a local issue, I believe the games that our district is playing are similar, and the discussion about metrics below is applicable to other issues. What games is our district playing?
Let’s start with a graph and a quote. The graph, Figure 1, comes from the ICSD 2023 Focus on Revenue Report.
In a March 4, 2024 article in our local new source, the Ithaca Voice, they said (first three paragraphs):
The Ithaca City School District (ICSD) is considering maintaining the current school tax rate for the next three school years in its budget for next school year, pending approval by voters in May.
The proposal is based on the assumption that Ithaca’s tax base will grow to provide funding that will absorb the district’s increasing costs.
Currently, property owners within the Ithaca City School District pay $16.22 in school taxes for every $1000 of taxable property they own — one of the lowest school tax rates county-wide.
In fact, the current budget proposal has the tax rate going down (Ithaca Voice, 4/23/2024).
The budget has been set for $168,935,371, which would result in a $15.68 tax rate per $1,000 in assessed property value, a slight reduction from the initially proposed $16.22 tax rate.
The tax rate can be very deceptive, and I’ll argue that it should not be used in discussing our budget and is generally not a relevant metric. I’ll get to a relevant metric, but first, let’s discuss scenarios where the tax rate goes down. For example, if there were a lot of homes being built, that would increase the tax base and reduce what each home has to pay. This isn’t the explanation for the ICSD, as the number of single-family building permit issues in the county has ranged from 87 to 173 from 2012 to 2022. There is some growth, but it is small compared to a $168 million budget and fairly stable.
Maybe there are just fewer students. In 2022–23, there were 4,844 students in the district. For the three years before that, it was 4748, 4834, and 5052, respectively (data from NYSED). There are fewer students than in 2019–20, but for the last few years, the population has been stable. This isn’t it, but these two examples are scenarios where the tax rate goes down and the taxpayer is likely to pay less. So, how is the ICSD able to lower the tax rate?
Figure 2 is a hint (Feb. 2024 Tompkins County Assessment Department report).
If the sale price of homes is increasing this fast, you can be sure that home assessments have gone up quickly too. In fact, home assessments have gone up a lot.
The Tompkins County Assessment Department published in its annual county-wide assessment report that property value in Tompkins County, on average, increased by 19.8%.
Two notes. This is the mean, while the median is 16.2%. The Ithaca Voice saved the report to which the quote refers on February 8, 2024. This isn’t in the report I linked to above the graph that has a Feb 14, 2024 date. I have no explanation as to why the later report has less information. Now, what does this mean for the average or median home owner?
As an example, for each $100,000 a home was valued at last year, the owner paid 100 * $16.42 = $1,642 in school taxes. This same $100,000 home is now valued at, on average, $119,800, so the school taxes are 119.8 * $15.68 = $1878.464, an increase of $236.46 or 14%. In other words, a more honest statement from our school district is that it is proposing to raise school taxes on average by 14% for homeowners. To be fair, by doing the same calculation, we can say the median homeowner’s taxes will go up 11%. The inflation rate for the last year was around 3.5%, and so our school district is asking for an increase about 3 times that of inflation. Promoting the idea that tax rates will stay stable or go down is deceptive, and I would say on purpose. Saying that we have the lowest tax rate county-wide is not just meaningless, but, I would say, purposefully deceptive.
The moral of the story is to make sure you understand the metric being used in any scenario. There is a saying that those who tell you what you want to hear are looking to help themselves, while those who tell you what you need to hear are trying to help you. More than likely, the metric someone is giving you is good for them. When school budgets are being proposed, we should all be asking, based on changes in home assessments, what is the mean and median change in a homeowner’s taxes.
Now, a tax increase like ours needs a serious explanation, and renting $500,000 clocks doesn’t cut it.
The Ithaca City School District plans to spend up to $500,000 to rent wall mounted clocks over the next five years, along with “related borrowing fees.” The district’s board of education voted unanimously to authorize the spending in a vote last week — taking the unusual move of bypassing its own finance committee.
As a final note, maybe the increase in taxes will have some great benefits for students or the community, but when the discussion starts off with deception, it is hard to believe that this is the case. Instead, we get rhetoric about how if we don’t pass this budget, it will have devastating consequences for the school district, which I imagine all districts say. What about the devastating consequences for, for example, retired homeowners in the area on a fixed income? Shrug.
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