Increase in School Tax Sparks Questions

91

v4By Terry Rogers

Property tax bills began to arrive in mailboxes last week and many residents were shocked to see a significant increase in their Milford school tax. A referendum passed in October 2015 increasing the operating expense tax rate. During informational meetings regarding the referendum, district officials indicated that for a home valued at $150,000, the tax rate would increase by approximately $120. However, homeowners are seeing bills with an increase of school taxes sometimes in excess of $500. Several residents expressed displeasure at the school board meeting on Monday, August 15.

“I was at the meeting where you talked about the referendum to the Lions Club,” said Joe Palermo. “I took notes and I reviewed it carefully. You said that a home valued at $150,000 would see an increase of around $120. I went door-to-door to the various developments in town and encouraged people to support the referendum based on that amount.” Mike Boyle, a resident of the Meadow at Shawnee, said that he saw an increase in his taxes of $581, a 91 percent increase.

Prior to the public comment portion of the meeting, Sara Croce, Chief Financial Officer of the school district, said that a presentation at the June 20 school board meeting explained the four different components of school tax paid by residents. The four different components are current operating expenses, tuition, debt service and match tax. In order to change current operating expenses or debt service, the district must put the request out to referendum and it must be approved by taxpayers. However, the tuition and match tax portions of school tax can be adjusted by the board without referendum based on state law.

“This is completely unrelated to the referendum increase which was for operating costs only,” Ms. Croce said. “When students require special services outside the district, we are mandated by federal law to provide those services. The district must pay 30 percent of those costs and the state pays the remaining 70 percent. This year, we saw a significant increase in the number of students requiring out-of-district services. One student who is in a residential placement costs the district $100,000 just for that one student and that is only the district’s share. Last year, there were just over 500 students in special programs both outside and inside the district. This year, there were almost 600.”

Ms. Croce explained that the bills for tuition to other districts, which Milford is required to pay, began arriving in March or April. She said that when the bills began to arrive, the district did not have the funding available to pay for them. They had to use local special education funds to cover the cost of the tuition. In June, the board added a tax increase in order to address the shortfall for the upcoming year based on historical data indicating that the number of special education students would continue to rise.

A review of the addendum for the June 20 meeting that is posted online did not indicate that there would be discussion about a tax increase at the school board meeting. However, when visitors arrived at the meeting, there was an addendum to the agenda with the presentation included, something that is common at Milford School Board meetings.

“There was no discussion about a tuition portion of the tax that the board could change on its own,” Mr. Boyle said. “I simply don’t trust you any longer as there is no transparency with this board. I feel like you are doing things behind the backs of the residents. I was on a school board. I’ve been in your shoes. It just seems to be that things change as you want them to. First, the Middle School cannot be repaired, now you are spending money to see if it can be. It is just a continual change with you guys and I simply can’t trust you.”

Ms. Croce said that the breakdown of the four portions of the school tax was explained during each presentation of the referendum request. A review of the slides used during the presentation does show that the district discussed the four components, stressing that the current vote was for operating expenses only and did not relate to the other three components.

“As a former accountant, I really do want to sit down and learn more from Ms. Croce,” Dan Marabello said. “We understand the assessment and value portion, I think, but the whole thing is so convoluted it simply does not make sense. I want to review the rates better because the increase was so much higher than what was discussed under the referendum.”

Ms. Croce said that the district had no other option but to raise the tuition tax rate as other districts must be paid when a child is sent to out-of-district schools. She explained that this had nothing to do with children whose parents choose to send their child to a different district, but only to those who required special services. The student who is funded under this tax must have an Individual Education Plan (IEP) that indicates they need the placement. One of the special services is the district’s own Intensive Learning Center, but not all students meet the criteria to attend that school. Students may attend the Sussex Consortium, which is in Cape Henlopen District, Howard T. Ennis and G.W. Carver, both in Indian River School District or Academic Challenge in Delmar. Sussex County Opportunity Program (SCOPE) in Woodbridge, Delaware’s School for the Deaf in Christina, John S. Charlton, Kent County Elementary ILC in Caesar Rodney as well as Kent Secondary ILC and Kent County Community School in Capital are also special schools outside the district.

“Districts with those types of schools will not see as much of an increase in tuition payment as Milford who does not have those types of schools,” Ms. Croce said. “Although we do have an ILC here, some of our students simply require services above and beyond what we can offer here in Milford. The federal government requires that we provide those services. The districts that provide them must be paid for the services they provide which is why we are where we are today.”

Ms. Croce explained that any taxpayer who is 65 or older or is disabled may qualify for a school tax reduction. In order to qualify, taxpayers must have been a full-time resident for five years and must not have income other than Social Security of more than $6,000 if single or $7,500 if married. Unfortunately, the deadline to apply for the tax reduction was April 30.  Ms. Croce suggested contacting the tax office to learn what can be done if someone is unable to pay the higher taxes. Ms. Croce and Superintendent Kevin Dickerson said that any resident who wishes to

the property tax issue can call the district at 302-422-1600 or make an appointment to come in and discuss their tax bill.