Wednesday, April 17, 2013

San Antonio Area Proposes New Schools

Judson Independent School District in San Antonio, Texas proposes a bond referendum to build two new schools.

The construction will cost taxpayers $83 million dollars.

One proposed school is Coppergate Elementary on an 18 acre lot near Anderson Loop (1604) and Thornton Lane. The new facility should decrease the student to teacher ratios at both Converse Elementary and Salinas Elementary. The starting enrollment is estimated near 560 students.

The second facility is a new high school near the intersection of Evans Road and Nacogdoches Road.  Upon opening, the school will enroll an estimated 850 students, freshmen and sophomores only. The second year of operation will extend to juniors as approximately 400 new freshmen enroll. The third year will expand to a four year high school, anticipating a freshmen class of 350 more.

New facilities with reduced teacher to student ratios should enhance student learning as long as parents still have input and oversight on transparent curricula.

Early voting on the bond referendum starts Monday April, 29, 2013 extending through May 7, 2013. The actual election day is May 11, 2013.

Parents and district residents should take a closer look at the proposal pamphlets circulating around the district. The merits of the expansion are obvious. The means of budgeting and allocating funds, however, may seem misleading.

The proposal claims the $83 million dollars will not come from raising any tax rates on ad valorum or property taxes.

San Antonio already voted to raise sales tax rates as part of Mayor Fidel Julian Castro's Pre-KSA sales tax increase.

The funds come from refinancing the public debt the school district already owes. In essence, they are not raising any funds or revenues to pay for the projects. They are borrowing the money. They are increasing the per capita public debt burden upon the tax payers. In essence, this means taxpayers will pay much more in the long run.

The refinancing will be at a lower interest rate. The refinancing itself is a good idea. However, fiscal responsibility would lean towards using the amount saved on interest payments instead to pay down the principle.

Refinancing usually means paying off a current loan, including interest and penalties, with a new loan at a lower interest rate. Using this method to "pay for" new properties isn't really a refinance proposal. Instead, it turns into a second mortgage in order to pay for the expansion.

The bond proposal is worded to sound as though the money will magically appear at no cost to taxpayers. A logical examination makes it appear more to be a "buy now, pay (a lot) later" payment plan. Those plans always seem to slow individual prosperity when done by a single family. In fact, the federal Dodd-Frank housing loan Act that enabled Fannie Mae and Freddie Mac used a similar strategy that caused the housing market to collapse.

The bond proposal only covers the construction and maintenance of the new facilities. It does not cover payroll costs for educators, faculty, or administrative staff.

San Antonio is already one of the cities in America with the highest per capita public debt. It would seem that responsible, ethical, and reasonable politicians and citizens would look first to pay down that debt before borrowing money we have no real plan to repay.

That is the real question posed before taxpayers.It comes down to cost-benefit analysis. Each voter in the district needs to be asking "how much will this cost me, in aggregate, over the next ten years". Another way of phrasing that same question would be "What is my share of the mortgage?".