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School funding commission finalizes recommendations
20140115-Blue Ribbon Commission
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(L-R) Blue Ribbon Commission members Cole Hendrix, Matthew Trowbridge, Ernest Chambers, and Steve Runkle
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by Tim Shea | Thursday, January 16, 2014 at 9:27 p.m.

The Blue Ribbon Commission on Sustainable School funding has finalized its report for City Council and the School Board.

The Commission has divided the findings into near- and long-term categories. Three of the five near-term possible actions include tax increases.

Former Mayor Bitsy Waters said the report “tees it up” for decision makers.

“There are some challenging choices to make here. I think it’s made clear…the nature of our community and the choices that we’ve made that give us a high per pupil cost in our school system,” Waters said. “That is a reality, and against that reality have come reductions in federal and state revenue, and a kind of stalling out of local revenue.”

The Commission is a 13-member citizen panel appointed by Charlottesville City Manager Maurice Jones to develop a sustainable funding model for the City’s schools.

Recent decreases in state and federal funding has left CCS to cut internally—slashing $1.4 million since 2010—and to ask the city council for one-time monies in addition to the schools’ annual allotment to balance the schools’ budget: $1.8 million from the General Fund and $1.49 million of the schools’ capital improvement money to balance 2013’s budget, and $2.63 million to balance the schools’ budget in 2014.

Charlottesville’s schools receive about one-third of the City’s General Fund, which, in the last 7 years, has netted the division approximately $40 million from the City annually. Including state and federal funds, the school’s fiscal year 2013 budget was about $70 million.

The Commission said that they have not prioritized any of the specific options.

The near-term “action alternatives” include:

  • Increasing the meals tax
  • Increasing the real estate tax
  • Increasing the lodging tax
  • Adjusting tuition rates for out-of-district students
  • Finding operational savings

A one percent meals tax increase would net the City an additional $2 million in new revenue, budget documents show.

The Commission said that the meals tax would collect some of its revenue from tourists, who don’t pay real estate and property tax, but use the City’s amenities.

Raising the real estate tax rate one cent would fetch about $550,000 in new revenue, documents show.

Currently, Charlottesville’s rate of 95 cents per $100 of assessed value ranks 13th out of 35 cities with rates that range from 57 cents to $1.65.

A “companion or alternative” to upping the real estate tax, the report says, is to revisit residential property assessments, with particular respect to single family homes that have been converted into multi-dwelling units.

The report suggests that some City properties are under-assessed, and that adjusting those assessments could create new revenue.

City Manager Maurice Jones and former City Manager Cole Hendrix said that this idea would need to be vetted for both accuracy and legality.

A one-cent lodging tax increase would raise $480,000, but Jones said that one-third of these funds go to the Charlottesville Albemarle Convention and Visitors Bureau, so it would have minimal effect on the schools.

Kindergarten through 8th grade out-of-district tuition for City schools in 2013-14 was $1,100 for a family’s first child, and $900 for each additional child. Grades nine through twelve is $1,400 for the first child and $1,200 for additional children.

The report suggests that these rates have remained relatively steady since the program’s inception in 1996.

In terms of finding operational savings, the Commission pointed to low student-teacher ratios, high numbers of administrative and other personnel, and transportation as significant drivers of cost.

The long-term “action alternatives” include:

  • Increasing the tax base by boosting middle-income housing in City neighborhoods
  • Sharing services with the University of Virginia and charging UVa for other services
  • Collaboration between Charlottesville and Albemarle schools
  • Closure of an elementary school

The report argues that, over time, increasing the amount of middle-income housing would strengthen the City’s tax base and boost enrollment.

Additionally, the Commission suggested capitalizing on the boom of new student housing construction to encourage the conversion of rental properties students once occupied back into single family homes.

The Commission also proposed opening conversations with the University of Virginia about payments in lieu of taxes—an action, the Commission says, many university towns take to account for tax losses which are the result of university expansion.

Currently, UVa pays taxes on property held in the school’s Real Estate Foundation, but the school does not pay taxes if the land is developed for University use.

Collaborating with Albemarle County Public Schools on a future magnet school and sharing space could also be long-term options, and “might be a way to address some of the conflicts about state funding that have arisen,” the report says.

The Commission also estimates between $1.5 and $2 million per year in operational savings would be realized from closing one elementary school.

What’s more, the report says that while the community values neighborhood elementary schools, the schools currently operate at excess capacity, and that few children walk to school.

As a result, the Commission said, the concept of neighborhood schools would not be impacted if one school were closed.

City Councilors Dede Smith and Kathy Galvin, both former school board members, could not be reached for comment.

Charlottesville School Board members Juandiego Wade, Willa Neale, and Jennifer McKeever said they were waiting until the Commission’s formal presentation before making public comments. 

Hendrix likened the findings to an annual report.

“If nothing else it’s an educational tool for the community,” Hendrix said. “Most people have never paid much attention to it, most people don’t have children in the school system…and this lays it all out for people.”

The Commission will present the report to City Council and the School Board at 4 p.m. on January 28 at CitySpace.

 

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