Just The Facts
The debate about whether new schools are needed in Loudon County is over. Designs and locations have been chosen and nearly two million dollars has been spent on design and construction documents. Phase 1 includes a new school in Greenback, a new middle school in Loudon and improvements and expansion of the Philadelphia School.
The building plan that has been approved by the school board is estimated to cost right around fifty million dollars.
Funding the building plan will absolutely require a property tax increase.
Below is a break down of just how much it might cost to fund the building program. I have tried to use the most conservative numbers and applications meaning over estimating costs to be safe.
Each property tax penny going to the building fund, rural debt, is worth $145,595.00.
For phase 1, if we borrow 50 million @ 4.5% for 25 years that would cost $277,916.24 per month x 12 months = $3,334,994.80 per year.
tax increase would generate $2,911,900.00 per year
What is sometimes forgotten is that not only has a Phase 1 building program been adopted but also included in the vote was a Phase 2 of the building program to be implemented as soon as possible after Phase 1 is completed. Phase 2 would be a new middle school in the north end of the county to alleviate overcrowding at Highland Park, Eatons and North Middle.
How would it effect the property tax increase if commission wanted to include Phase 2, a new middle school on the north end of the county, in the funding process?
A new north end middle school would be similar to the new Loudon Middle school in scope and design but would need to be a little larger. So estimate another 20 million bringing the building program to 70 million. But just to be extra careful let's estimate total loan needed for both Phase 1 and Phase 2 to be 75 million.
If we borrow 75 million @ 4.5% for 25 years that would cost $416,874.36 per month x 12 months = $5,002,492.30 per year.
So phase 1
alone at a cost of 50 million would require a 20 cent property
tax increase to add to the current 5 cents already in the
building fund, rural debt.
Below are the calculations of how much an additional 20, 25, 30 or 35 cent property tax increase would increase the tax bill on a $150,000.00 home, $150,000 is the average home value in Loudon County.
A 20 cent property tax increase would cost an additional $75 per year or $6.25/month.
A 25 cent property tax increase would cost an additional $93.75 per year or $7.81/month.
A 30 cent property tax increase would cost an additional $112.50 per year or $9.38/month.
A 35 cent property tax increase would cost an additional $131.25 per year or $10.94/month.
Remember, I'm estimating the building program at it's highest possible estimates. Also remember if a tax increase is passed and it all goes to the building fund, rural debt fund, Lenoir City residents will not have to pay that tax increase.
Commissioners are faced with a daunting and unenviable task. Can or should they raise property tax in what could be considered one of the worst economies in decades?If they choose not to raise property taxes for the building program, they will surely have to raise property taxes some amount just to continue to hold the status quo for the current school buildings meaning more band aids for over crowding and in the case of Greenback, over crowding and unsafe conditions.