Bond and levy with contingency is confusing

February 12, 2014 

The Peninsula School District’s Board of Directors will ask voters for a pair of tax measures on the primary ballot this August — one a capital bond and the other a capital levy — but one of them won’t cost voters as much as the sticker price if both of them pass. Does that sound confusing? We think so.

Although it’s a process that’s in its early stages — Superintendent Chuck Cuzzetto will present resolution and contingency language to the board when it meets March 6 at the Purdy Elementary library — we’re afraid many voters are going to look at the bottom line with two tax increases and not read the fine print.

The school board voted Thursday to move forward with a $60 million capital bond following three public-input meetings and additional discussion during a regular board meeting late last month. If it achieves a 60 percent supermajority, it would help the school district address its most pressing need, which is overcrowding at the elementary level.

You’ve heard this story before: Artondale is an old building that needs to be renovated or, even better, rebuilt. The school district owns property on Harbor Hill in Gig Harbor North, where it would like to build another elementary school. That proposal came in the form of a four-year, $50 million capital levy last November, and voters rejected it.

Since then, the school board has met with many taxpayers, including the Citizens for Responsible School Spending, who encouraged a no vote last fall. It’s been encouraging to see the process that resulted, particularly because Jerry Gibbs and Ken Manning, the leaders of the “no” campaign, have been open to supporting a measure if it met certain criteria.

Most notably, there seems to be a greater potential for support if the proposition were a bond as opposed to a levy. Bonds spread tax dollars across decades and keep tax rates down, and that’s important for those who no longer have children in the school district, or for those who are on fixed incomes and can’t afford a steep increase. Levies, on the other hand, are typically collected for a two- , three- or four-year period. They save long-term interest payments, but the lump sum can spike tax rates.

This community is used to levies for maintenance and operations. After a rough period in the early 1990s, which saw four levies and two bonds fail from 1992-95, the Peninsula School District has passed every one since 1999. But the district has had just one capital measure pass in the past 20 years: a bond in May 2003 that received 60.9 percent of the vote.

So, what is contingency language, and what does it have to do with making one proposition less expensive?

School officials are calling this bond-plus-levy concept a win-win because they say voters will be able to decide their preference for financing. They’ll insert language in the levy proposal during the next few weeks to drop the collection amount to pay for just technology upgrades — About $2 million — if both propositions pass. But if only one or the other passes, the collection will be the full amount for whichever measure gets approved.

We’re not sure the school board is doing itself any favors with this approach. Just last month, directors presented a series of five options to the public, and four of them were for capital levies. One had a similar bond-plus-levy combination, although the levy part was later tossed out.

Suddenly, the levy reappeared and the contingency piece first became part of the concept during last Thursday’s four-hour meeting, and directors were divided on which approach to take. They seemed to be more interested in pleasing the Citizens for Responsible School Spending, asking specifically if they would publicly support multiple items, before they pushed forward on a 3-2 vote.

The school district’s needs are clear, and the board is moving forward with a redistricting effort that could help to alleviate some overcrowding by the start of the 2015-16 academic year. But we hope the board will reconsider this approach and simplify a proposition to one bond with concise language that states exactly what the funds will be used for. There’s still time before any statement needs to be submitted to the county auditor’s office.

Complicating matters might just get in the way of all their good efforts.

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