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The WakeEd blog is devoted to discussing and answering questions about the major issues facing the Wake County school system. How will the new student assignment plan balance diversity, stability, proximity and stability? How will Jim Merrill replace Tony Tata as the new superintendent of the state's largest district? How will voters react to a $810 million school construction bond referendum on Oct. 8 ballot? How will this fall's school board elections impact the future of the district?

WakeEd is maintained by The News & Observer's Wake schools reporter, T. Keung Hui. While Keung posts information and analysis on the issues, keep us posted on your suggestions, questions, tips and what you're doing to cope with the changes in Wake's schools.

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Wake County school board facilities committee to resume discussion of next construction program

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Work will resume today on setting the ground work for a 2013 Wake County school construction bond issue.

The school board's facilities committee will continue discussion today on the draft capital planning issues that would frame the next construction program. The committee will also receive information on the process for determining needs for new schools.

One of the questions facing the school board and ultimately the county commissioners is whether to go for a referendum in spring or fall 2013.

A spring bond issue would have low voter turnout since nothing else is on the ballot but it would speed up when schools could be built. A fall bond issue would attract a larger turnout but could push the opening of new schools back by a year because of when the money would be available.

UPDATE

Today's meeting was cancelled becuase of a lack of a quorum.

School board members Susan Evans and Jim Martin attended the meeting. Evans said that Chris Malone, the committee chairman, called in sick. She said they waited until 4:30 p.m., 30 minutes after the meeting was supposed to start, to see if board member Deborah Prickett would arrive.

1341081886 Wake County school board facilities committee to resume discussion of next construction program The News and Observer Copyright 2011 The News and Observer . All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Where was Malone and Prickett?

Too bad the meeting was cancelled due to two members not showing up. I would think Chris would be over his election night hangover by today and Debra is always complaining she doesn't have time to attend meetings. Just go ahead an resign Chris, you don't have time to fool with this unimportant school board stuff.

You should talk Kevin into resigning

Since he's as inept as the Governor.

Waited until 4:30 pm

Evans and Martin haven't learned anything about the Republicans.  They don't meet at 4:30 pm, it is 4:30 am ?

APFOs

I'm not sure Wake has ever been inclined to enact an APFO, but I think the North Carolina courts have invalidated the ones that have been enacted in other counties as exceeding the powers delegated to counties by the state.

Yup...

Most recently, Durham.

At what point do the

At what point do the counties get together and start telling the state of NC that it's overstepping it's powers which should be reserved for the counties?

Yeah....

So, doesn't work like that.

There's a constitutional push-and-pull between the federal government and the state governments which doesn't exist between the state and county governments.  The federal government has limited, enumerated, powers (well, in theory at least) and everything else goes either to the states or to the people.  In contrast, North Carolina counties are just divisions of the state government and only have the authority delegated to them by the state.

An example of how this plays out:  In most cases, the Federal Government, does not have the power to order a state to do anything -- it can say "we'll give you $X if you do this," but can't say "you have to do this."  The state, however, can tell the counties to do whatever.

Personally, I agree with you -- decisions are usually best when made locally.  But, we see all sorts of cases where the state intervenes in that principle.  That's why we have the state calendar law and the abysmal standard course of study.

I know, just

I know, just dreaming.....

We could, however, elect a GA that allows counties to levy taxes such as impact fees, etc.  The counties can impose any tax they want with GA approval....so, the problem is not the law but the GA. 

Yes....

Because the GA is composed of politicians, and politicians exist to aggrandize power.  

At the WSCA debate in the '10 Commissioners race, ALL of the candidates, both R and D,  said that the commissioners should retain control of the budget, and that the school district should not have taxing authority.  None of them wanted to yield authority to somebody else, because doing so would mean less power for themselves.

So much of the past issues could have been avoided.

I will never understand why Wake county (and others) do not have an Adequate Public Facilities Ordinance that is referenced before any approval of building is given.  The APFO immediately controls overbuilding and saturation that leaves the area without adequate transportation, roads, schools to handle the growth.

 

It seems that the county approves subdivisions and all other permits based on some strange formula that rarely addresses APF's to support that growth.

 

We're always trying to catch up.  No coordination between permits being issued and school systems and transportation.  It's backwards and expensive.

That has always confused me

That has always confused me as well....

I believe it is because much of the state, WC in particular, has been controlled by developers, realtors and real estate lawyers for many moons now.  It seems that artificially keeping housing prices and property taxes down to attract newcomers while shifting the infrastructure burden to tax payers is a nice way to line your pockets.

Confused ?

Infrastructure costs $ - someone has to pay for it.  Pick your poison - higher home prices, higher property taxes, or higher state income taxes.  No matter how you look at it the users of the services will pay. The industry of  Developers, Realtors, and Lawyers are not the users of the services - the people who buy the houses are.

The industry of

The industry of  Developers, Realtors, and Lawyers are not the users of the services - the people who buy the houses are.

The developers, realtor and lawyers are currently selling the homes without including the price to pay for the new infrastructure required to support those new homes.  Sure, those folks pay property taxes etc after their in the homes but it takes years and years of that to pay for what had to be built.  The developers get to sell the houses at a lower cost without it dipping in to their bottom line.  That allows them to sell the house faster and easier.  That also hurts the values of existing homes and causes rapid growth. 

Newcomers pay a lower prices for their new homes because the current residents are subsidizing it!  The cost of new roads, new schools, new water and sewer should be included the cost of the new homes.  A new home of equal size and location should be more costly than an older home because it's new.  That generally doesn't happen in WC because existing home owners are paying for the new infrastructure as well as the old. 

Read more here: http://blogs.newsobserver.com/comment/reply/48344/260869#storylink=cpy

Newcomers pay a lower price

Unless you were a Native American living in a wigwam someone along the way paid for your infrastructure. Are you complaining that you did not have the opportunity to pay an impact fee and therefore your home was subsidized off the backs of the people before you ?

 

 

 

Didn't purchase a new

Didn't purchase a new home....But based on your moronic comment, I venture to guess you don't understand the difference between purchasing a new home vs. an existing home with regard to strain on infrastructure.

Moronic comment

That's mature.  My point is that unless you were the very first one, you yourself represented growth and someone paid for your infrastructure. 

Why don't you jump in when

Why don't you jump in when you have a clue....that way, we don't have to hear from you anymore.

I simply refuse to waste my time explaining anything to you bc you've repeated exhibited an inability to comprehend.

Strain?

And you don't understand that your home was a new home at one time and also put a strain on infrastructure. Who paid for that strain?

Some of it should have (and

Some of it should have (and in fact may have) been paid for by the developer the cost of which was passed on to the original home owner (whom I purchased the home from).  The original home owner has been paying property taxes and the mortgage on that home for 20 years.  That value was still existing in the home value when I purchased it from them.  In other words, had the home not had water, sewer or a school to attend, I would have paid a lot less for it.  Therefore, by paying a higher price for the home that has access to those things, I'm paying for that existing infrastructure in my mortgage and continue through property taxes.

If the new growth in WC were paying for itself through increased revenue from property taxes, why then, do we need to pass a bond that will increase taxes on everyone, including those already paying property taxes for what they use?  If it were truly a bond to pay for a short-term project such as a new school, the property taxes would go down after the bond is paid for, right?  When was the last time property taxes went down in WC?  The bottom line is that the evidence is clear....the growth is not paying for itself, otherwise property taxes would stay the same and the money would be their to fund new schools.  Is the money there?  No, it is not.  Rest my case.

Not so fast Perry Mason

Great arguement, only one problem. If we had the ability to go 20 years into the future the person living in a house built today would be saying the same thing you are saying today. And did the water and sewer that is at your home today "magically appear" overnight? Who paid for that? Growth does not (and never has) paid for it self at the time it occurs. The alternative is negative growth, go to Detriot and see how that works.

Case Dismissed

Cute...not surprisingly, you

Cute...not surprisingly, you are clueless again.

Developers all across this country have been asked to step up and pay at least some of the cost of the infrastructure that will be required to support the new developments they are building and making money off of. I don't mind them making money, but not at the tax payers expense. Not to mention the fact that it leads to uncontrolled growth because it's not operating under the real market forces. This is the problem when govt subsidizes anything. In this case, the developers are gearing the political wheels to get themselves subsidized....nothing new, just wrong.

BS

In order for the Developer to pay for these things the price of new housing will increase, that increase will also make the price of existing homes increase. What you are asking for is the Developer to subsidize existing homes. It is the local municipalities job to provide schools, police, trash ect. not a private company. These things are paid with the increased tax revenue from new construction. I don't know why you think Developers have such deep pockets to be able to pay for everything. The life expectancy of a home is 65 years, once it is built the government collects revenue for that period of time then usually the home is destroyed and some other building is built to take its place continuing the revenue stream. Development subsidizes the Government!

Thanks for stepping in

..

Thanks for stepping in

Thanks for stepping in.  I am just speechless at the ignorance.  Thinking of a new real estate ad -  If you buy a new house in wake county you will be assessed $60,000 at the time of the purchase for schools, sewer, roads, and other infrastructure you will need in the future.  On the other hand if you buy an already existing home there is no assessment.   What do you think ?

FYI, I've lived in several

FYI, I've lived in several places where developers where expected to both pay for water and sewer upgrades and fund the building of new schools either through land donation and/or fees. The way we do things it WC is not common. There is zero connection between growth and schools. Why do you think that is and whom do you think it benefits?

By your logic

By your logic automobile companies should be paying for road construction and upkeep. 

Umm...the state collects a

Umm...the state collects a highway use tax on every car sold....that money goes directly to the highway trust fund.

Umm

Highway use tax - so the be fair the highway use tax is assessed and collected each time the title is transferred. Applying it to real estate  if you buy a house, new or otherwise you would pay a tax.  So you agree with this ?

First, we're talking about

First, we're talking about schools which are not being paid for and no one said anything about 60k...The sewer and water are generally being paid for throu tax revenues collected but the new school buildings are not as explained elsewhere. Leave it to you to just exaggerate and lie, typical liberal tactic....

Clueless again

Funding of schools - payment at the time of construction is paid by Bonds that are then paid off over 20 year by tax revenue.  Over the 18 years I have lived here my taxes have increased less than inflation. 70% of county taxes go to the school system, with 50% funding the operating budget and 20% the capital budget

As far as water and sewer - if you live in the county you are on well and septic individual homeowners fund with their house construction.  In a city subdivision the builder pays for infrastructure of the subdivision that is then passed on to the homeowner.  Water and Sewer is funded by separate bills and is not part of the property tax assessment. 

With regards to the $60k,  simple math. $30m for a new elementary school / 500 students = $60k per student.  Isn't that what you are suggesting ? That all newcomers immediately fund the building of a new school.

 

So...

I don't think that tax revenue from a new home is sufficient to pay for the capital costs of, for example, building new schools.  If it did, then there would never be a need for a tax increase to pay for bond payments, because the revenue from the new homes would be sufficient to cover those payments.  

To the extent that a new home imposes external costs, it makes economic sense for the people responible for the new home to pay those costs.  In this case, it will be a combination of the builder and the first homeowner he sells to.  If you don't require them to do so, then they end up making economically inefficient decisions.

Revenue from a new home

Over what period of time are you considering ?  Coming from New England houses were typically 60-100+ years old, so property taxes were generated over this period of time, which more than paid for the funding of the capital cost of a school and the infrastructure around it. 

Well...

Capital has a lifespan -- I have to imagine that while some New England homes are 100+ years old, not many schools are.  And, if they are, substantial capital has been regularly invested into keeping them up-to-date.

Wake County schools go through the same renewal process.  Sanderson HS, for example, was renewed in 1999-2000.  Bond money goes for these sorts of projects, in addition to building brand new schools.

I believe the district uses a 30-year bond, which approximates the lifespan of a school before it needs to be renewed.

Capital Life span

A renewal is not a total tear down and rebuild and nor are you having to buy land and other infrastructure that goes around it.  Sure nothing lasts forever, but one a piece of land is developed the property tax stream is much longer than 30 years. 

Well...

Thinking back to Sanderson, the renewal cost was pretty high.  But, that's a decent point.  For accounting purposes, though, you have to assign a lifespan, and 30 years seems to be pretty common.

30 years

The 30 years is more tied to the financing period.   But it is all about managing cash flow, which shearertw seems to miss.  Because infrastructure costs are long term investments they are  financed with Bonds. As long as the property taxes of the new comers can sustain the incremental debt service payments of the added infrastructure then the newcomers provide an overall benefit.  This is further evidenced by the fact that property taxes over the last 18 years have risen less than inflation - meaning the newcomers are accretive and are actually subsidizing the rest of us. 

Eh...

So, I agree that there's no need to do anything if the property tax revenue meets or exceeds the sum of the incremental debt service and annual operating expenses.  I don't think you have a good claim about property taxes rising less than inflation, because property tax rates are mixed up in the bubble.  Re-valuations are set to happen again in a few years; we'll have to see what happens to property tax rates then.

The initial tax revenue does

The initial tax revenue does not pay for (and never has) the long term revenue created by the development does. A new school does not need to be built until it reaches capacity. If it starts out 50% full and over the next 10 years reaches 100% should the burden of building a new school be placed on the people moving here after you reach capacity and the people who filled the school from 51% to 100% pay nothing? Is the last thing you place in box the thing that fills it up or do all the things place into it prior to the last thing have an impact? Or do all the things in the box have an impact on it being full?

The act of building a new home does not impact a school, having children is what impacts schools. So if you want to collect the cost from those that are responsible you should set up a County Tax Collection center at Wake Med, Rex and Duke maternity centers. But who would want to do that when the Real Estate Industry is so much easier to demonize. And by increasing the cost of new construction it artificially inflates the price of existing construction. And what person already living here wouldn't lke that.

Well...

I'll answer your second paragraph first:  There is a connection between new homes and children.  In a new neighborhood of single-family homes, some portion will be bought by (a)  people with school-age kids; another portion will be bought by (b) people soon to have school-age kids; another portion (c) will be bought by people who will never have school-age kids, but who, down the road, will sell to people in categories (a) and (b).  

I'm not trying to demonize the home building industry. But, the fact is that there are externalities when somebody moves here -- they need roads, sewer, police protection, ambulance, parks and schools.  So, those people should pay for those externalities.  And, the easiest way to get them to do that is through the cost of their home since it's tied to their moving here and also allows them to spread out the expense over time.  To the extent that their property taxes don't pay for those things, there should be an additional fee to make up the difference.  Of course, there's no way to get to the precise amount for any household.  So, you take some sort of average.

As to your first paragraph, I would charge each of them, whether they come just before their local school is built or just before it's fully at capacity.   The fees should be constant, not "Oh, we're going to build three schools next year, so that will be $X, divided by 10,000 homes, that's $Y . . . "  

Of course, it's all pie-in-the-sky, because the homebuilders' lobby has been in bed with the GA for decades, either through donations or more literally in the case of Tillis' office.

Right, then wrong. Yes, in

Right, then wrong.

Yes, in order for a developer to pay for these things, the price of new housing will increase....that's the point.  That will, as you suggest, lead to an increase in existing home values.  Currently, a home that's been around for 65 years has paid for the infrastructure that supports that home several times over through property taxes.  Those property taxes are what is paying for the schools, roads, water and sewer lines, etc under the current model.  So, if I've lived in my home for 30 years and paid for the cost of that home and the infrastructure to support it several times over, why should I have to continue to pay for infrastructure just so some developer can put in 1000 homes around the corner causing a need for a new ES, expanded sewer treatment, widening of the roads, etc?  You have it completely backwards.  Existing home owners are subsidizing the developers ability to lower the cost of new homes below what the market value would be if they were sold at their true, real cost.  That lowers the values of ALL real estate which causes the government to take in less money so they have to raise property taxes on existing homes to pay for the new infrastructure cost. 

Think about it this way, if I decide to build a house 1 mile from anyone else and 1 mile from existing water and sewer lines, why should I expect the county to run services to me and have everyone else pay for it?  What's the difference between that and a developer doing it and also asking for a new ES to be built to support that neighborhood as well?  This is why growth is out of control in WC.  This is why there are too many neighborhoods with homes on 0.12 acres.  This is why I sit in traffic every day and will soon have to pay a toll just to avoid it.  This is why we can't build schools fast enough. 

Seems like theirs at least two developers/real estate lawyers and/or realtors on here...

Wrong

I guess everyone arrived in Wake County one day and there were roads, schools, waste water treatment plants ect... already here! Yes your home has been paying for the infrastructure for the past 30 years, but one the day it was built it had not contributed! To say the existing homes have paid for everything is BS unless your home is a mud hut and a couple of thousand years old.

As to your last example, I have never seen any municipality do what you describe. I have seen where a Developer has paid to extend sewer to develop a property. The municipality is usually receptive because they are thinking about the tax revenue this will generate, the down side is the impact on schools ect.. But they have a positive revenue stream that will last for several life times so they get a bond to improve the infrastructure and pay for it with the future revenue. This is the model that built Wake County from having cart path's, outhouses and one room schools to what we have today. How much did you contribute? What you are saying is "I paid nothing extra, I am here and want to close the door behind me and make everyone else pay more. And by doing so I increase the value of my property!!!" Before going after the evil Lawyers, Developers and Realtors, maybe you should look at yourself and ask "What impact have I had, What extra have I given?"

PS: I am sure there is someone who has lived in the area longer than you have, living in house older than yours, sitting in traffic with you, paying the same tolls and blaming you for it. Think about that.

Where's all the tax revenue

Where's all the tax revenue from the growth that paid for itself?  If that were true, why do we need a bond that will cause property taxes to increase?

With proper planning and coordination, there is no need for property taxes to increase for any reason other than inflation or some new service people want that was not previously available.....period.  The school capacity issue in WC will almost certainly lead to an increase in property taxes.  Every red cent of that increase, in reality, was a subsidy to a developer paid for by tax payers.

?

Its collected over the life of the new homes built. Once it is built the Municipality has a long term revenue stream to cover long term problems like roads and schools. Even if we did not have new people moving here, people that are here will continue to have children. Maybe we should have a surcharge for every new birth? People without children are not impacting the schools so why should they pay for it. Everyone can argue that someone else should pay for the things that benefit all of us. Or all of us can pay for the things that benefit all of us?

You're missing one major

You're missing one major point.  Your entire argument would be correct if property taxes remained the same for everyone with the exception of rising with inflation.  That is not the case.  Property taxes are increase and will be increasing faster than inflation.  That could be explained by an increase in services but, again, that is not the case.  For example, our kids are going to schools with larger, not smaller, class sizes.  Therefore, even over time, the growth is not paying for itself with increased tax revenues.  That's the fact, Jack.

Your missing many points

Yes taxes increase, that and death are the only 2 things that will probably be true for the forseeable future. Is the home you bought 20 years ago still worth what you paid for it? Even without new homes being built, roads, schools and sewers need to be repaired and replaced. Why not stop collecting taxes and everytime this happens we could divide the cost by the number of residents and pay as we go? The people before you paid for many of the reasons you moved here. You will pay for the things that attract future residents. Your kids are going to schools that were built from the taxes of people who lived here long before you got here or did you bring a school with you?

Don't forget we also have a county sales tax. So when those new homes are built there is also a revenue stream from the future purchases these new comers make over their life in Wale County.

Not missing the point(s) at

Not missing the point(s) at all...Your argument has been that new development brings in new revenue that funds additional whatever....If that were true, taxes (adjusted for inflation) would not need to increase.  If we're so fortunate that our home values increase faster than inflation, then tax rates can actual go down (which does happen after reassessments for example).  The problem with your argument is that net taxes, adjusting for inflation are going up and are going to have to go way up to pay for the balloon in kids entering middle and HS in the next decade.  That's all because we haven't paid for it and we haven't planned for it.  That failure to pay as we go was money that went directly to the real estate industry as a subsidy and now it's gone.  The only way to pay for these boondoggle now is massive property tax increases or lower quality schools.

You keep missing the point

You keep missing the point that once the home is built the revenue is almost perpetual. The short fall today will be offset by future revenues. I bought a house in Raleigh in 2007 that was built in 1946 and sold for less than $7000.00 when it was new. I paid over $200,000.00 for and demolished it and replaced it with a home that had a tax value of almost $1,000,000. The all the infrastructure was installed years ago and the City and County has increased it's future tax revenue (by almost 5 times what they were receiving and will receive it for 65+ more years) without doing anything. Should I get a refund from them? Did I get subsidized?

All of your arguments could be used against you by anyone who arrived here prior to your arrival. You favor a "pay as you go" system but only starting with people who got here after you did. Maybe we can go back 30+years and charge everyone for the cost of infrastructure.....Oh wait we have that system already it's called taxes. The "subsidy" you speak  of not only when to the people involved in the Real Estate market, it also went to every home owner in the county. You keep refer back to kids and schools. every house built does not come with children. If children are the issue then once again should we have a surcharge for children, we would hate for childless people to "subsidize" you and your children!!

Your argument is easily summed up with " I have benefited from the taxes of others, but don't want future generations to benefit from my taxes. If they need a road or a school they should pay for. And yes I intend to use them once they are built because I was here before they went in and it is my right to." Growth has never been a pay as you go proposition! But you want to move that model after benefiting and not paying as you went!

That's not my position at

That's not my position at all.  I did already tell you I benefited (in the short-term) from when I moved here but I'm getting ready to get hammered with a massive tax increase due to the overgrowth that as led to a shortage of capacity in a lot of areas, not just schools.

Your argument has a fundamental flaw I keep pointing out but you keep ignoring.  If the growth was bringing in revenue in now or in the future, we wouldn't need to float bonds that led to a net increase in property taxes.  The bond would simply be replacing the former bond that was already paid off.  That's not what is happening.  The shortfall is accumulating because we're not keeping up with the necessary infrastructure because we're not letting true market forces control the growth.  If this place is so great, people will move and pay the higher prices for housing without us having to subsidize it.  That will allow us to catch up.  I'm not proposing this model because it benefits me...I'm proposing it because the alternative is unsustainable and will lead to a futher degradation of the school system.  The folks are not going to be willing to continue to pay for bond after bond for the schools as is needed.  The school system will suffer for that and you can thank the real estate community for greasing the hands of the politicians to keep it that way.

Massive Tax increase

Massive tax increase - where is that coming from ?  

Floating a bond does not necessarily mean a tax increase. Are you are suggesting that all new growth be funded out of the current operating budget receipts ?

BTW - I looked at my property tax bills over the last 18 years.  Over the years the average increase was 2%,  this is well below inflation.  

 

Check out all the nuggets of

Check out all the nuggets of truth in here... There are so many facts from the past in here (circa 2006) that refute the crap of revisionist history you libs try and dump from MYR, assignment to base schools near your home etc under the former former BOE it's amazing. This doc was clearly written by them. Also, it clearly shows they acknowledged the need for better growth control and planning including a lobby for impact fees.

One example on an unrelated topic was the admission by this old BOE that more than 4000 students were forced to attend a school more than 5 miles from their home....that's more than the numbers currently not happy with there assignment Nader the current assignment policy.

webarchive.wcpss.net/bond/fact_fiction_extended.html

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About the blogger

T. Keung Hui covers Wake schools.
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