Friday, May 29, 2009

Area High School Graduation Test Results

Today’s Banner-Herald has a story about how area high school juniors did on their first crack at the Georgia High School Graduation Test. Much to my dismay (believe it or not), the results for the Clarke County School District were entirely predictable. For the particulars, see Ryan Blackburn’s article and its accompanying chart.

So, let’s run the numbers. Of the eight area school systems mentioned in the article, Clarke County scored the lowest, not to mention below the state average, in all four categories.

Concerning the math portion of the test, 89% of the CCSD’s students passed. Barrow and Oglethorpe Counties tallied the next lowest percentage at 93%. Jefferson City and Oconee County led the way with 97%. The state average was 94%.

In language arts, 84% of the CCSD juniors passed. The next lowest percentage was shared by Madison and Oglethorpe Counties at 87%. The highest percentage went to Oconee Countyat 95%. The state average was 90%.

Regarding science, Clarke County came in at 82%. Madison and Oglethorpe Counties had the next lowest percentages at 84%. Oconee County again scored the highest at 94%. The state average was 88%.

Finally, 79% of the CCSD’s juniors passed the social studies portion of the test. Madison County was next lowest at 83%. Commerce City schools scored the best at 95%. The state average was 87%.

Next, consider the per pupil spending by these various school systems for FY 2008:

Barrow County (12,194 students) $7968.16
Clarke County (11,834 students) $11,180.05
Commerce City (1504 students) $8692.96
Jackson County (6852 students) $10,279.22
Jefferson City (2472 students) $7738.37
Madison County (4711 students) $8942.75
Oconee County (6471 students) $8542.34
Oglethorpe County (2438 students) $8756.68
State Average $8967.83

Once again, the obvious conclusion to be drawn is that the strategy of raising student achievement through increased expenditures is one that is easily debunked. I realize that I harp on this point, but the lack of funds argument is one of the favorites routinely trotted out to excuse the CCSD’s academic shortcomings.

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Thursday, May 28, 2009

Impertinent Observations (D.C. edition)

Is it just me, or are there others concerned about the proliferation of “czars" and "task forces” for this or that under the Obama administration? At least Cabinet officials have to be confirmed by the Senate, even if such approval is perfunctory; these so-called czars and task forces have been installed simply by executive fiat and given vast regulatory and administrative powers without even a hint of legal sanction or public accountability. No good will come of this.

Remember those tens of billions of dollars the Obama administration (and, in fairness, the Bush administration before it) threw at Chrysler and General Motors? After months of painting the legitimate bondholders as greedy roadblocks to recovery, while divvying up the companies to Obama’s union supporters, both automakers are headed toward bankruptcy of one sort or another. Both should have declared “real” bankruptcy months ago and let the courts settle their affairs according to the law. Instead, a staggering number of taxpayer dollars have gone down the bailout hole – never to be seen again. So the same guys who destroyed the home mortgage industry are now doing the same thing to the car makers. No good will come of this, either.

Advocates of more and higher taxes should take note of this. It seems that as taxes increase, the evil rich are, predictably, leaving Maryland in droves and thereby reducing tax revenue even as rates go up. As discussed in earlier posts, a similar thing happened here in our fair burg: after lecturing folks incessantly to save water, the Unified Government raised the rates so as to make up for the lost revenue when the populace did precisely as asked. Higher tax rates and utility fees affect behavior – but you would never know it by listening to those who propose the increases, so look for the same pattern to repeat itself at the federal, state, and local levels.

I fear that the White House is pushing Israel into a corner vis-à-vis Iran. Thus far, the Obama administration’s response to a series of missile launches, nuclear tests, and spinning centrifuges on the part of the Axis of Evil has been . . . nothing meaningful whatsoever (Joe Biden, call your office). As the Norks refine their nuclear and missile technology, the foremost importers of which have been Syria and Iran, Israel’s position becomes increasingly untenable. Iran, which funds and supports proxy wars against Israel via Hezbollah and Hamas, is developing and/or buying nuclear and ballistic technology as fast as it can, with the stated goal of obliterating Israel, a.k.a the “little Satan.” Because the western response in general and the American response in particular have been timid in the extreme (and again, this approach did not start with Obama), the Netanyahu government may have to take matters into its own hands. Of course, it would be ritually condemned for doing so, even if the alternative was national suicide – but it is always the fault of the Jews, isn’t it?

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Wednesday, May 20, 2009

Impertinent Observations (tax edition)

As I drove over to have lunch wife my wife yesterday, I listened to The Herd on ESPN Radio. "And just what does that have to do with taxes?" you sensibly ask. The answer is that host Colin Cowherd was discussing the influence local and state taxes have on the willingness of professional athletes to sign with certain franchises. Cowherd, a sports commentator, displayed a far more perceptive grasp of the implications of tax policy than do most politicians.

The results are in on those California budget (for the most part meaning tax increase) referenda. Of the six measures on the ballot, five were defeated by almost two-to-one margins (1A through 1E, see statewide and county level results here). Pointedly, the only one that passed (1F), by an almost three-to-one margin, prohibits pay increases for elected officials during years in which the state is running a deficit (see the Voter Information Guide to the referenda here).

Get used to stories like these. As the predictable outcome of years of profligate spending comes home to roost, governments at the local, state, and federal levels will be hunting for revenue wherever they can find (or extort) it. But, of course, what they probably will not do is fundamentally rethink their spending practices – which is why the voters of the Golden State wisely voted down a package of short-term fixes and why the current blizzard of federal stimulus and bailouts will not work.

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Tuesday, May 19, 2009

General Services District Lament (again)

Apparently prompted by complaints from residents in the Urban Services District, meaning the former City of Athens, the Unified Government of Athens-Clarke County recently came out with a statement about how the folks over at Solid Waste have been playing catch-up since the snow storm back at the beginning of March (scroll down to the second item). As a result, the local media dutifully reported the difficulties caused by the storm to the county’s leaf & limb pickup schedule (see here, here, and here [scroll down to the next to last item]), which has been so severe as to prompt Solid Waste to augment its efforts by hiring private contractors.

To which my response is – all together now – “What leaf and limb pick-up?”

As I noted last year, contrary to what the folks downs at City Hall would have you believe, that service is not available to all residents of the county. To review the particulars of that episode, see here and here.

And while I am at it. another consequence of the storm was damage to the engine bay roof at Fire Station No. 6. We are now some eleven weeks removed from the snowfall and there are still no signs of life whatsoever at the station located at the intersection of Athena and Olympic. See here and here for my previous gripes about that. The Unified Government has insurance coverage for damage to its buildings, right? So what is the holdup in repairing the roof?

Had similar damage occurred at, say Fire Station No. 3 (a.k.a. the Five Points Taj Mahal), I seriously doubt that almost three months after the fact repairs would not even be underway. Once again, it appears that the folks who live in the formerly unincorporated area of the county are getting the short end of the stick.

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Monday, May 11, 2009

Concerning Sales Tax Rates

According to the Georgia Department of Revenue’s County Rate Chart, all but a handful of the state’s 159 counties charge the full 7% sales tax allowed by law. This percentage includes the 4% allocated to the State of Georgia and, for the most part, additional 1% Local Option (LOST), Special Purpose (SPLOST), and Educational (ELOST) taxes charged by the various counties (there are a few different scenarios hither and yon, not to mention the City of Atlanta’s additional 1% tax, but the “LSE” designation is pretty constant across the board).

Locally, according to the DOR’s Historical Rate Chart, we here in Clarke County have been paying LOST continuously since January 1978, SPLOST almost continuously since October 1985 (with the exceptions of October 1986 through March 1988 and April 1992 through March 1995), and ELOST continuously since July 1997 (see page 5 of the PDF).

Though we can do nothing directly about the state’s 4%, as I see it there are several significant problems with the continued reliance of the Unified Government of Athens-Clarke County and the Clarke County School District on the various optional sales taxes.

The first is that, even if capital projects themselves are constructed using only SPLOST or ELOST funds, once built they doubtlessly will require ongoing personnel, maintenance, and operational expenses, all of which come out of the general budget and not out of optional sales taxes. The point is that these capital projects will have an impact on the budget from the point of construction onward, regardless of the nature of the funding for the construction itself.

Also, consider that revenue bonds are routinely issued in addition to the optional sales taxes. For example, the Unified Government issued $200 million in bonds just last year and the CCSD issued $50 million just the year before that. The idea that optional sales taxes will serve to reduce bonded indebtedness is pure fiction (and yes, I know that the CCSD bonds are supposed to be paid off with sales tax, but if the amount collected is insufficient to do so, the balance ostensibly will be applied to property tax - but that is another matter about which I have commented before).

Then there is the problem of taking property off of the tax digest. Clarke County is the smallest in the state by area, vast swaths of which are not on the tax roll by virtue of being own by the Unified Government, the Clarke County School District, the Board of Regents, the State of Georgia, and even the imperial federal government of the United States. To me, increasing the ratio further by purchasing even more land with optional sales tax dollars is an obviously self-defeating proposition; as more property becomes tax-exempt because it is owned by government, more revenue must be derived from the taxable property that remains just to keep the budgets balanced – never mind the revenue needed to increase spending.

Finally, though they are pitched as “temporary,” the reality is that optional sales taxes never go away. On the one hand, government cries paucity at the very thought of discontinuing such taxes. On the other hand, it claims that such levies will keep property tax low (which never seems to work out, does out?). Besides which, the SOP is to start the planning for a continuation of the optional sales tax even before the current one is up and running, much less completed. In my view the referendum process is structured to favor continuation of such taxes. The strategy thus far has been to promise various narrow interest groups that their per projects will be built, thereby securing the support of them all for passage of the tax referendum. And then there has been the practice of holding (or at least trying to hold) such referenda on dates guaranteed to result in a low turnout so as to magnify the influence of those interest groups (though the General Assembly has tightened this one up a bit).

The root of the problem, though, is that the appetite for money never lets up. At City Hall, the Unified Government is constantly pushing for more revenue in the forms of a new regional (or statewide, as the case may be) 1% transportation sales tax and an increase in the local hotel/motel tax from 7% to 8%. Over on Mitchell Bridge Road, the CCSD whines incessantly about “austerity cuts,” even as it takes in tens of millions of dollars from the state year after year. And so it goes.

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Tuesday, May 5, 2009

CCSD Spending: A Rejoinder

The education reporter for the Banner-Herald called me up a couple of times to discuss the Clarke County School District’s budget for an article that appeared in yesterday’s edition (probably because I am always bitching about the District’s spending and financial practices, huh?).

I am always happy to spout off about this or that, but there remains a bit of trepidation about going on the record with a reporter. I have been misquoted in the local press (more than once), but do not necessarily attribute that to ulterior motives. Sometimes, what one person says (or what one person thinks he/she said) is not what another person hears. I would have penned the article somewhat differently, but have no particular qualms about the way it turned out.

Be that as it may, I would like to emphasize a few points did not come out in the article.

I fully support keeping those 59 first-grade paraprofessionals in the budget. I have no doubt that the District spends far too much money – and has done so for many years – but dispute that the classroom is the best place to start making personnel cuts. My preferred target would be over on Mitchell Bridge Road.

As I noted back in February, the District spend more that the state average across all seven of the categories tracked by the Georgia Department of Education for FY 2008:

• Instruction $7357.46 (20.81% above the state average of $6090.18)
• Pupil Services $303.20 (5.23% above the state average of $288.13)
• Staff Services $730.77 (57.68% above the state average of $463.44)
• General Administration $461.09 (4.42% above the state average of $441.58)
• School Administration $634.01 (13.97% above the state average of $556.29)
• Transportation $714.04 (63.77% above the state average of $436.01)
• Maintenance & Operations $979.49 (41.50% above the state average of $692.20)
• Total $11,180.05 (24.67% above the state average of $8967.83)

Thus, it seems to me that the areas in which to start trimming the budget should be fairly obvious, specifically Staff Services and Transportation.

Finally, though the District appears to be doing better than in past years insofar as getting its proposed budget out in front of the public is concerned, it still has a long way to go. For example, the PDF of the tentative budget is an 18 page document that, after a cursory review of expected revenues and expenses, merely states the baseline budget from the current year, notes that some items have been subtracted (some of which were one-time expenses anyway) and that others have been added (some of which are “must do”) and produces a budget number for the upcoming year. The vast majority of the District’s spending is not considered in a meaningful manner at all. The same goes for the slide presentation presented at the budget hearings.

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Friday, May 1, 2009

Concerning Property Tax Millage Rates

Public attention is typically focused on the millage rates and assessments local governments use to determine property tax, and rightfully so. On the other hand, however, it can be instructive to delve deeper into the minutia of the matter.

To wit, most folks are complete unaware that there are five tax districts in Athens-Clarke County. They are:

•Urban Services District (the former City of Athens)
•General Services District (the former unincorporated area of Clarke County)
•Downtown Development Authority District
•Bogart (a separate municipality, portions of which are contained within Athens-Clarke County)
•Winterville (a separate municipality, wholly contained within Athens-Clarke County)

Nor do most folks realize the breakdown of to where their property tax dollars go. Assuming that the Unified Government ups its portion of the millage rate as proposed, the distribution of property tax revenue in the Urban Services District and the General Services District will be:

•State of Georgia (0.25 mills) – 0.75%
•Unified Government of Athens Clarke County (13.20 mills) – 39.46%
•Clarke County School District (20.00 mills) – 59.79%

Combined, these total 33.45 mills for the two districts in question. The Downtown Development Authority District incurs an additional 1.0 mills. Bogart and Winterville incur an additional 2.935 and 2.90 mills to fund their respective municipal governments. A chart detailing the various millage rates charged in each of the five districts may be found here.

So now that we have the numbers out of the way, some contrarian observations concerning local millage rates are in order.

The Mayor and Commission routinely tout that they reduced the millage rate twice in recent years. This is true in a technical sense but, as is frequently the case with government at all levels, there is more to the story than just what the politicians claim.

The 0.3 mills reduction in 2004 was due solely to the work of members of the Clarke County Republican Party, who analyzed the budget and presented a list of potential reductions to the folks down at City Hall. To their credit, the Mayor and Commission did adopt many of our recommendations, thereby “freeing up” funds for a millage rate reduction. It should never be forgotten, though, that the original plan was simply to spend the new revenue generated by growth in the tax digest (this last part always seems to get left out of the discussion).

The 0.6 mills reduction in 2005 was a sham, pure and simple. The millage rate reduction was offset by the institution of the stormwater utility fee (even the Unified Government’s budget documents acknowledged this) which, by design, also hit those property owners such as churches and schools who are exempt from property tax. Now, we will have the situation where the millage rate is back to within 0.2 mills of where it was prior to the imposition of the fee – a fee that will be with us forever regardless of future millage rate hikes.

Contrary to the manner in which they repeatedly have been sold to the public, the imposition of SPLOST has been an abject failure in limiting property tax increases. For example, in 2002 when its SPLOST 2 began, the CCSD’s portion of the millage rate was 18.75 mills; it increased to 19.25 mills in 2003, to 19.50 mills in 2004, and to the constitutionally imposed maximum of 20.00 mills in 2005 (and, of course, assessments increased during this period as well).

The SPLOST 3 bonds issued by the CCSD in 2007 included a provision that, should the limited duration sales tax be insufficient to repay the bonds, the balance required would be added to the CCSD’s portion of the millage rate. It took considerable digging on my part, but I eventually found out that, due to case law from way back when, bonded indebtedness does not count against the constitutional 20 mills limit (which, to my mind, renders the limit somewhat specious). And no one can tell me how such a transfer from sales tax to property tax would work – explicitly contrary to the CCSD bond resolution, the Georgia Constitution does not authorize any such transfer.

I will bitch yet again about the CCSD’s 0.25 mills rate increase in 2004. The increase was added to the budget after the legally required public hearings were held on a budget that did not include a millage rate hike – in direct violation of the Taxpayers’ Bill of Rights. As I have explained ad nauseam, the rationale given for allowing this to take place does not even remotely conform to either the Department of Revenue’s regulations or the provisions of O.C.G.A.

Finally, I am to be quoted in an upcoming Banner-Herald article on the CCSD’s budget; I fully suspect that the long knives will come out within a matter of seconds.

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