Pickerington Area Taxpayers Alliance

Should the city of Pickerington split from the existing school district and create its own city public school district?

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THE SOUTHEAST MESSENGER

Impact fees for public schools facing uphill battle

July 3, 2006

Should the city of Pickerington split from the existing school district and create its own city public school district?

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By Katelyn Sattler

Staff Writer

In June 2005 a bill was introduced in the Ohio House of Representatives intended to partially address school funding by allowing school districts to enact impact fees on new construction.
Impact fees are fees paid by residential or commercial developers to offset the impact of growth and development on local infrastructure.
The bill, known as HB 299, is now in the House Local, Municipal Government and Urban Revitalization Committee and has had a number of hearings to allow proponents and opponents of the bill to give testimony.
The bill has eight co-sponsors, including Rep. Tim Schaffer (R-Dist. 5), and includes the Ohio School Boards Association (OSBA) as a supporter of the legislation. However, there are some heavy hitters who are opposed to the bill.
Viewpoints in support of HB 299
Pickerington Board of Education president Lisa Reade favors passage of the bill.
Reade is concerned about the overcrowding of the schools and believes impact fees will help bring in money to help build new schools.
?“I am concerned and doing what I can do to raise awareness about the issue, such as writing letters to legislators,?” said Reade.
The Pickerington school board passed a resolution in support of this bill during its Sept. 12, 2005 meeting.
Schaffer, a co-sponsor of the bill, said of the school funding fix, ?“There were many ideas floating around. This was the most prominent one. This bill is a good thing for school and the economy.?”
?“There are 30 states under litigation like we went through (on school funding). One state that left the property tax model of funding schools is being sued to go back on to it,?” continued Schaffer. ?“Every year we are giving more and more money to local schools through the appropriations process. We have doubled basic aid in the last decade, and parity aid to poor school quadrupled in the same decade. Currently, in Ohio, 33 percent of the budget goes to K-12. Medicaid take up another 40 percent. There?’s not a lot left over.?”

Story Cont.

?“Before 1957, Ohio spent nothing on building schools. From 1957 through the 1980s, Ohio spent about $100 million. In the last decade, Ohio has spent billions. Of course, we have a ways to go yet. We?’re not done,?” continued Schaffer. ?“Senator Barak Obama (D-ILL) has said that the test of a union is not if it is perfect but working towards perfection.?”

Dennis Lupher, an economist and Schaffer?’s Democratic opponent in the state senate race this fall, stated that, ?“Impact fees, properly structured, are a movement in the right direction; however, if this is little more than a campaign gimmick, I think it?’s time for a change in leadership.?”
Jennifer Economus, legislative specialist with the OSBA, gave testimony on the bill to the committee, saying, ?“School districts are continually looking for alternative ways to address funding realities and school districts are using every tool available to them. Impact fees represent another tool in the toolbox for growing school districts to use in the funding of school facilities.?”
She added, ?“The process for levying impact fees for school facilities contained in HB 299 is specific and requires those levying the fee to adopt a capital facilities plan (CFP) for the development area. The capital facilities plan must include an analysis of the current capacity of existing structures, the current level of use of such facilities and a description of additional or expanded facilities necessitated by development in the area. The impact fee cannot exceed the cost of the project improvements. There must be a clear nexus between necessity and the amount of the impact fee...the fee does not necessarily have to be a dollar amount attached to each new home. Schools may accept land donations in lieu of funds.?” Economus?’ full testimony can be found online at http://www.osba-ohio.org/HB299testimony.htm.

Viewpoints opposing HB 299

The Ohio Home Builders Association (OHBA) and the Ohio Chamber of Commerce oppose the bill, which also would give counties and townships the ability to impose impact fees on new construction.
Vince Squillace, lobbyist and executive vice president of the OHBA, said in an interview that his biggest objection to the bill ?“is the school district portion. General impact fees are not unusual, but maybe only two states allow school districts to impose impact fees. It is difficult to determine the nexus between new construction and how school districts are funded. For municipalities it?’s easy to determine how many cars are added to the roads per home and area of park ground per resident.?”

Squillace believes the part of the bill allowing school districts to impose impact fees is unconstitutional, as there is no clear consensus on how school should be funded.
In addition, he feels it is difficult to make the connection be-tween new houses and the impact on the school district, i.e. the breakdown of elementary, middle school, junior high and high school students per household.

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Squillace?’ thoughts about HB 299 include: How does it fit in with the overall school funding plan? There seems to be a constitutional problem in that in Ohio taxes must be applied evenly, and in this case it is essentially a flat fee tax on a house, not the child. There may not be enough housing construction to build new schools and the district may have to give the money back if it?’s not used. Since it is a flat fee on each house instead of a percentage, it encourages the construction of more expensive homes, which Squillace said begs the question ?“do we build communities or country clubs??”
Squillace thinks Pickerington is ?“suffering from its own success,?” noting that for years, Pickerington didn?’t have a move-up market.
The growth in the area is a recent phenomenon of the last 30-35 years or so.
When asked about possible solutions to Pickerington schools?’ overcrowding problems, he speculated, ?“Maybe Pickerington should de-annex part of the school district.?”
Another possibility Squillace felt would be fairer than the current bill would be to impose a retroactive impact fee on all homes that currently exist within the school district.
He also proposed a possible admittedly thorny solution to school funding in Ohio.
?“Back in the mid ?‘70s, the Ohio legislature put a cap on property tax growth as a result of runaway valuation in Cuyahoga County. If the legislature removed the cap so taxes could grow with increases in valuation, school districts could be guaranteed an increase in income each year. Of course, districts would still need bonds approved for new buildings, so they would still have to go to the public to sell bonds.?”
He is surprised the public doesn?’t pressure the legislature to reverse the cap on property tax growth, known as the ?“928 credits.?”
When asked if home builders have an obligation to the community, he replied, ?“Sure, but not necessarily a duty. Building associations are active in community affairs, such as campaigning for issues and candidates.?”
Squillace asked a question many in the Pickerington school district have asked, ?“Why doesn?’t the community support the schools? A lack of planning has resulted in much of this.?”
He predicted the growth is ?“not going to impact the education of the kids. Pickerington has well-publicized problems. Why do people keep coming? For the schools. Pickerington will continue to be a great school district without impact fees.?”
When asked if he thought the bill would be passed in committee, he expressed doubt.
?“There?’s too much opposition. There are too many issues. There?’s been no examination of budgetary detail,?” said Squillace.
The OHBA and the Ohio Chamber of Commerce position statements on this bill can be found online at http://www.ohiohba.com/legislative_actions.htm.
Other viewpoints
Representative Jon Peterson (R-Dist. 02), the bill?’s primary sponsor, anticipates the committee will vote on the bill after session resumes in the fall.
He said it may include removing the language allowing school districts to impose impact fees, noting that ?“even the Buckeye Institute is against this part of the bill.?”
Samuel Staley, Ph.D., of the Buckeye Institute, states in testimony to the committee on HB 299 that, ?“School impact fees lack transparency, have poorly defined service areas, and lack professional standards for estimating the impact of a new housing unit on the costs of educating children in public schools.?”
His full testimony can be found online at http://www.buckeyeinstitute.org/article/636.
In the end, the objections to allowing school districts to impose impact fees may be too great to be overcome.
Reade summed up the situation for Pickerington schools stating, ?“The district?’s future has always been in our own hands. We can?’t wait for the legislature to ride in like a white knight to fix school funding. They?’re not going to.?”