Phase-in would reduce initial impact to taxpayers; financial market conditions that make phase-in possible create urgency
Historically low interest rates are providing a window of opportunity that the Loveland City School Board is prepared to capture for residents if the November 5 ballot issue for the district passes: The potential to phase in the collection of the bond and permanent improvement (PI) portion of the tax so that full collection takes place over three years - instead of one year.
The board’s move is significant in that it would reduce the immediate impact to taxpayers by phasing in the bond/PI tax over three years.
In order to demonstrate their intention to pursue the phased-in financing structure of the bond/PI issue, the board unanimously approved a resolution at the September 9 special Board of Education meeting that would direct the district to pursue the financing structure with passage of the November 5 ballot issue.
“We worked hard, with community involvement, to come up with the most cost-effective plan and have continued to look for ways to reduce the financial strain on our residents,” stated Art Jarvis, board president. “Since the board voted in July to place the ballot issue before voters in November, interest rates have continued to fall. We have very favorable financial market conditions that allow us to potentially capture historic low interest rates and phase in the tax.”
Jarvis continued: “That’s a win-win. But, now it is up to voters because interest rates will not remain this low for long so this adds to the urgency with the November 5 ballot issue.”
With the phased-in financial structure, the November 5 issue, if passed, will be reduced to less than half of the initial request for property owners in the first year and gradually increase over the following two years. While the former total ballot issue cost would have been $49/month for every $100,000 of appraised home value (per the county auditor’s website), beginning in year one, the monthly amount, assuming current interest rates, would now gradually phase in as follows:
- Year One (2020): $20/month
- Year Two (2021): $35/month
- Year Three (2022): $49/month (full collection)
“Additionally, voters should know that the phased-in tax collection would not impact the timing of the construction projects or the duration of the bond levy,” said Jarvis.
More information about the November 5 ballot issue and the master plan can be found at https://www.lovelandschools.org/November2019Levy.aspx.