The Wall Street Journal
By JOE BARRETT
MORROW, Ohio—The housing boom has left the sprawling school district based in this former rail town on the Little Miami River with gleaming new buildings and a dilemma over how to keep them funded.
Three times in the past 15 months, voters have rejected levies that would have kept the Little Miami School District in the black. Each time, the district fell further behind and had to ask for more. On Tuesday, voters will face the biggest request yet—a new real-estate tax that amounts to $519 per $100,000 of assessed value, nearly twice the rate rejected in November.
Backers say the levy, combined with already deep cuts, is the only way to prevent a fiscal emergency that would force a state takeover of the schools. “It’s the downturn of an entire community. People are going to start looking at moving and your property value is going to go through the floor,” said Julie Salmons Perelman, a 44-year-old part-time veterinary technician with three children in the schools, who sat stuffing bags filled with campaign literature one morning last week.
Bill Nicholson, 54, a longtime opponent of the levies, calls the rising requests in the face of repeated rejections “insanity.” In the past, he has argued on behalf of people with fixed incomes, but he recently lost his own job as a consultant in the perfume industry. “How can I cut a budget of zero” to pay more taxes, he asked.
Across the country, fast-growing suburban districts raced during the housing boom to open enough schools. Now many are being forced to make big cuts or ask voters for more money to run them during a housing bust and lingering recession.
“Taxpayers are just not willing to support any sort of an increase,” said Dan Domenech, executive director of the American Association of School Administrators. He said he has recently met with superintendents from Minnesota, Virginia, Florida and California who face similar problems.
The recession has hit Ohio hard, but the state has tried to keep funneling money to education. While state agencies have faced cuts of as much as 30%, most school districts are seeing reductions of 1% this school year and 2% the next.
The 100-square-mile Little Miami School District is home to several older towns like Morrow, population 1,500, horse and soybean farms, and new subdivisions. It is the fastest-growing part of Warren County, about 25 miles north of Cincinnati. The county’s unemployment rate in December was 9.3%, compared with 10.7% statewide.
Since 2002, the district’s student population has grown by 51% to 4,250. To keep pace, local voters approved a special real-estate tax in 2002 and a $62.5 million bond for school construction in 2006.
The district’s budget woes began in July 2007, when a change in state funding formulas cut $6 million over two years. The district’s annual budget is about $30 million.
In November 2008, the school board proposed a 1% levy on earned income, aiming to spare seniors and others on fixed incomes. Voters rejected that 58% to 42%.
In May 2009, the board tried a different tack, with a three-year real-estate levy of about $305 per $100,000 of assessed value.
High-school students lined up at a main intersection in the district to remind people to vote. Opponents paid for a billboard urging a “no” vote.
After that measure failed by the same margin, the district closed two elementary schools; cut 82 positions, bringing staff levels down to 385; and slashed art, music and physical-education classes for kindergarten through fourth grade.
Meanwhile, district officials braced for the triennial property tax assessment, which had been growing by 22% to 28%. The 2009 reassessment showed a 9% drop.
That widened the projected budget gap, and the board proposed a rising five-year levy on last November’s ballot. The new proposal started at $243 per $100,000 of assessed value and gradually rose to $397 in year five. Backers launched a Facebook group and purchased the opposite side of the billboard that opponents were advertising on.
The margin of defeat narrowed to 52% to 48%, but opponents prevailed again.
Today, Little Miami High School still looks brand new, but parts appear abandoned. Bookshelves in the library are cordoned off, because there are no aides to check books in and out. Rows of monitors and hard drives go unused in a former computer lab.
Math teacher Roger Levo’s algebra class, with 38 students, is more crowded than ever. “I didn’t think it was going to work,” he said of the biggest class he has taught in his 27 years in the district. He pointed to five chairs he brought in to supplement the 33 desks. “They rotate,” he said.
The latest levy request is higher because collections wouldn’t begin until next January. This school year, the district expects a deficit of $1.7 million. Without a levy, the deficit next year would grow to between $5 million and $6 million.
Opponents such as Bill Brausch, a 65-year-old landscaper, have put up hand-painted signs throughout the community. He advocates a combination of salary cuts, private fund raising and a return to the idea of the 1% tax on earned income defeated 15 months ago.
“What they want is this pot of gold,” Mr. Brausch said of the school board. “They’re beating a dead horse.”
