Tax to help schools runs into static because RSD would get some money

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Marta Jewson/The Lens

Ongoing renovations and construction, such as this new gym at McMain Secondary High School will eventually need to be maintained. A tax on the Dec. 6 ballot would provide money for such future capital needs.

Ongoing renovations and construction, such as this new gym at McMain Secondary High School will eventually need to be maintained. A tax on the Dec. 6 ballot would provide money for such future capital needs.

Next month, New Orleans voters will decide whether to extend an expiring property tax that finances repairs to public school buildings, but the measure is facing resistance from unlikely people: some members of the Orleans Parish School Board.

Indeed, three out of the seven members voted against even sending the question to voters. That’s because the measure takes millions of dollars now controlled by the School Board and puts them in the hands of the Recovery School District, even though the state-run district isn’t mentioned anywhere in the ballot proposition.

The narrow vote shows just how much some board members are concerned about the expansion of control and power at the RSD. This financial struggle is playing out at a time when the board thought improving schools would be returning from the RSD, which was originally created to temporarily operate and improve failing schools.

Instead, improved schools that could have moved back to local control have not done so, and the RSD is settling in as a long-term governance structure parallel to the elected School Board.

And while each entity eyes the other with some disdain, their futures for now are intertwined because they’re required to cooperate on such things as building repairs. Some see this tax as having a secondary effect of financially disentangling the two districts.

Though the existence of the School Board is enshrined in the state constitution, the number of students it oversees and how much power it continues to wield is another matter.

Vote would extend tax for new purpose

At issue is a 5-mill tax that would bring in about $15 million annually. Voters in 1995 approved the new tax to finance a $175 million renovation program for the schools. It’s set to expire in 2021, after the loans that paid for the work are paid off.

The proposition before voters on Dec. 6 is whether to keep the tax and dedicate the money as a facilities safety net the schools have never had. The tax would be for 10 years.

Few dispute that the city’s schools need further repair money, even after a post-Katrina federal infusion of $1.8 billion in rebuilding money. While eye-popping, that figure simply wasn’t enough to help every school. Further, this dedicated money would ensure that recently opened schools will have repair money in coming years, as inevitable problems present themselves.

The argument, though, is over who should hold that money and make the decisions.

Paying for school repairs was much simpler 20 years ago, when there was a single entity controlling, assigning, building and repairing all the public schools in the city.

Now, the School Board owns all the buildings, but the RSD decides who occupies most of them. The RSD and the board jointly planned how to spend federal renovation money. And upkeep is generally the responsibility of the independent charter operator that occupies a building.

In fact, it’s so complicated that the districts themselves don’t quite seem to know yet exactly how the money would be managed.

The RSD became an all-charter district this year, providing general oversight to 57 schools run by 24 charter organizations. The RSD schools enroll about 30,000 students. The Orleans Parish School Board oversees 14 charter schools and operates six direct-run, or traditionally run, schools. The School Board campuses have about 12,000 students.

This tax can provide facilities money to the handful of charters schools in New Orleans that were chartered directly by the state school board — but only if they are located on School Board owned property. For instance, International High School’s campus is owned by the School Board and would be eligible for those funds. However it appears the French Immersion school Lycee Francais de la Nouvelle-Orleans, which rents its space from a church, would not receive facility funding.

Dissention on the School Board

School Board member Leslie Ellison voted against the resolution to put the tax before voters, saying in a recent interview that the proposition is misleading.

“On the ballot in December, it’s going to show millage for Orleans Parish School Board,” Ellison said. “It’s not going to say anything about RSD.”

Board members Cynthia Cade and Ira Thomas also voted no, resulting in a 4-3 approval vote. The resolution was offered by board member Woody Koppel and seconded by member Sarah Usdin. Members Nolan Marshall Jr. and Seth Bloom also voted for the measure.

Asked if the proposition was deceptive, Ellison said “Oh definitely. It’s misleading. It’s deceitful. Perhaps that may not have been the intent but that’s exactly what it’s doing.”

The School Board’s interim superintendent, Stan Smith, said the wording was “initially crafted” by the board’s bond attorneys at Foley & Judell. The Louisiana Legislative Auditor’s office and the state Bond Commission then approved.

Asked whether a board member could have offered a change to the wording, Smith said yes, but the new language would have to go back through the approval process.

Ellison said she is not against establishing a facilities fund.

“I support redirecting the funds [from the old repair program to a new one], however, not to an entity that has no accountability to the public at all,” Ellison said.

She’s referring to the fact that the RSD does not answer to locally elected officials.

Ellison said she would have preferred waiting a year. In that time, she would have pushed for state legislation to keep the facility money under the School Board’s control. Ellison said the administration typically alerts the School Board to bills that would affect the district, but she does not recall being made aware of the bill that would become Act 543.

Ellison said she thinks a facilities office in the RSD is an unnecessary duplication of services.

“Deplorable conditions”

Her colleagues on the board and others who support the tax say the discussion shouldn’t be about political control, but about the conditions of the schools.

The millage that is winding down was passed in the 1995 when schools were in rough shape, said Marshall, the board’s president.

“I’ve lived and worked in the schools during the period in which we had no money to maintain the buildings,” Marshall said. “It was deplorable conditions, and I don’t ever want to see us go back to that.”

And a solution such as Ellison’s doesn’t make much sense, he said. With the Recovery district holding its charters accountable, it would only complicate things to have Orleans Parish hold the charter accountable for the state of the building, he said.

As to whether the School Board should oversee the capital work on the buildings it owns, Marshall said that’s a question for the governor and the legislature.

“We didn’t create the RSD, and we’re not going to abolish the RSD,” he said.

He says it makes sense for each district to monitor its own charters. And the buildings need to be taken care of.

“I’m not going to deprive the schools of the maintenance money they need because I don’t like how the state has given us the RSD to control some of our schools,” he said.

Board member Usdin also voted in favor of the resolution.

“I believe that it’s really good for all of our schools,” she said. “It’s really not about governance or type of school for me.”

Longtime facilities manager Ken Ducote agrees. Ducote works as a consultant for the Orleans Parish School Board and a collective of locally authorized charters. For many years before Katrina, he was the top facilities person within the New Orleans school system.

The money is needed, he says, whether or not everyone agrees on how it will be managed, or by whom.

“We’ve already been going nine years and haven’t solved all these governance questions,” Ducote said.

Regardless of who’s controlling the buildings, they need to be preserved he said. And while some people dislike the Recovery School District’s presence, Ducote says the buildings — and, consequently, children’s education — shouldn’t suffer.

“A lot of those negative feelings are justified but they are misplaced when they are applied to preserving the buildings,” he said.

Smith supports the tax because there isn’t now a dedicated source of capital projects, such as roof replacements or other large-scale repairs.

“It’s important that we have a source of funds to maintain them in a condition that keeps them safe and secure for students,” Smith said.

“It doesn’t represent a tax increase to the taxpayers,” he said. “It’s just a repurposing of funds to another use.”

Recovery School District officials support the proposition. Though the local School Board owns the facilities, when a failing school was turned over to the Recovery district, the responsibility of maintaining the building went with it.

RSD facilities chief Tiffany Declour said this year’s budget for capital work was $2.8 million for 64 facilities, which she says is not enough.

Approval or not, change is coming

Even if the proposition doesn’t pass, money will change hands and new offices will be set up as soon as more debt is paid down. That’s because the law requires the School Board to also divvy up the part of its general sales-tax revenue it spent on paying down debt, based on its spending as of July 1. That was budgeted at $2.8 million.

The flow of money is guided by Act 543, sponsored by New Orleans state Rep. Walt Leger and signed into law by Gov. Bobby Jindal this summer. Though clearly written with New Orleans in mind, the law is meant to apply statewide – so it doesn’t mention the Orleans Parish School Board by name.

The law requires the School Board to transfer the tax revenues to the RSD on a per-pupil basis.

Of the 42,000 public school students in the two New Orleans districts, about 70 percent attend RSD charter schools. So eventually, the RSD would get 70 percent of the tax money, if the proportion stays the same.

The initial money is modest, and sets up a new bureaucracy.

Under the law, the School Board will transfer a small amount — $15 per student — to the RSD, and set aside the same amount in a new account in its own coffers. The law requires both the RSD and the School Board to use that money to set up a bureaucracy to administer the facility funds. Those parallel offices would monitor their respective facilities, manage leases, handle emergency repairs and administer a revolving loan fund.

If passed, it the 5-mill property assessment would be an extension of the tax first approved in 1995 to pay off bonds through 2021. That means that a portion of the money must go to that debt-reduction purpose first, with the remainder going to the two new facilities-oversight offices.

The bonds for the earlier repairs were sold over five years, which is not unusual for such a large sum. That means some will be paid off sooner – as early as next year – and the rest will be settled over the course of the next several years.

If voters don’t approve the Dec. 6 measure, the property tax dedicated to paying off these debts will shrink as the bonds are paid off. If approved, the amount going to the new facilities funds will increase with each passing year before taking in all of the money raised after 2021.

The two facility-fund offices each would establish a revolving-loan fund for campuses. Should a school need to replace its roof, but not have the money on hand, it could borrow the money interest-free from its respective district’s fund. Then the school would pay it back in the following years with its yearly facility fund allotment.

The districts also will offer to manage facilities work for a fee. That is a service a charter school could elect to use in lieu of another contractor or in-house management.

The law says the money has to be used on bricks-and-mortar project and can’t be redirected to pay for such things as operating expenses or insurance.

Asked how a new facility office would work if the millage were to pass, Declour said that is still in the works.

The district has a priority before working out those details, said RSD Deputy Chief of Staff Laura Hawkins.

“I think we’re less concerned with how the money flows and getting the millage passed at this time,” she said.

Proposition text as it will appear on the ballot:

“Shall the Orleans Parish School board (the “School Board”) levy a tax of four and ninety-seven hundredths mills on the dollar of the assessed valuation of property within the City of New Orleans assessed for City Taxation, (an estimated $15,540,000 reasonably expected at this time to be collected from the levy of the tax for an entire year), for a period of ten (10) years, beginning in 2015, for the purpose of preservation, improvement and capital repairs of all existing public school facilities, to be levied and collected in the same manner as is set forth in Article VIII, Section 13(C)(Second) of the Louisiana Constitution of 1974; provided that said tax is to be levied each calendar year at a millage rate not in excess of the difference between 4.97 mills and any millage levied in such calendar year for any outstanding general obligation bonds of the School Board?”

 

 

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