** Relevant Article: Vote “NO” to Keep Your Property Taxes Low **
On May 6, 2017, VOTE NO for PROPOSITION NO. 1.
The City of San Antonio, as of September 30, 2016, is $2.3 billion dollars in debt. It can’t, and shouldn’t, loan out $450 million dollars to the Alamo Community College District (ACCD).
ACCD, on its own, has over $500 million in Outstanding Debt and Principal and Interest Payments.
To whom does it owe money?
You, the taxpayers.
That’s right. Even though your current Ad Valorem Tax Rate to ACCD is $0.149150 for every $100, ACCD still wants to ask you for $450 million in General Obligation Bonds.
What will ACCD do with the $450 million?
Repair and expand its five schools: Northeast Lakeview, Northwest Vista, Palo Alto, San Antonio College, and St. Philip’s.
Keep in mind, though, that in addition to the debt you will be creating for yourselves by passing PROPOSITION 1, you will also be raising your property taxes in the future, all of which will go toward paying off what ACCD already owes you ($500 million) and the City of San Antonio’s outstanding debt of $2.3 billion.
Individuals who are either disabled or over 65 will receive tax exemptions of up to $30,000, so it’s safe to say that they won’t be as adversely affected as everyone else by the tax rate increase.
Of course, you might be wondering: How many San Antonians are exempt (or partially exempt) from being taxed by ACCD?
Well, according to the U.S. Census Bureau, 10.4 percent of San Antonians are “Over 65.” 10.3 percent of them are disabled and under the age of 65. In total, 289,800 out of 1.4 million are either disabled or “Over 65.”
It’s also important to note that only 58,321 out of the city’s entire population attends an ACCD college. That’s 4 percent of all San Antonians.
Why should 75 percent of residents—1,050,000 individuals who don’t receive any kind of tax exemption from ACCD–foot the bill for only 4 percent of the population?
The ACCD’s Board of Trustees claims that PROP 1 “[won’t] raise district property taxes,” yet the evidence suggests otherwise.
If you vote in favor of PROPOSITION NO. 1, ACCD will thank you by increasing your “Ad Valorem” taxes, alternatively known as property taxes.
If not now, eventually.
In fact, the ACCD’s 2015-2016 Annual Budget shows the Board of Trustees’ ten-year plan to institute “modest” tax rate increases for 2021, 2023, 2024, and 2025, promising that none will ever “[exceed] 5.0 percent in any given year.”
However, based on ACCD’s present debt situation, it’s clear that those tax rates will be far from “modest.”
Let’s take a look at how the system currently works and what ACCD plans to do in the long term.
For 2015 and 2016, ACCD’s operating revenue from Ad Valorem Taxes totaled $132.3 million. $55.6 million of that was labeled as “restricted revenue” for debt on General Obligation Bonds and maintenance tax notes.
From now until 2020, ACCD will use approximately $10 million of its property-tax revenue as the “principal and interest payment” toward half-a-billion dollars’ worth of outstanding debt.
After 2020, ACCD’s tax-derived payments will skyrocket to $70 million a year until its existing General Bond Obligations are paid off in 2036.
Imagine what your “modest” tax rate will begin to look like in 2021.
The City of San Antonio also secures its outstanding debt obligations through property taxes, and that’s how the ACCD plans to pay for the requested $450 million in General Obligation Bonds.
Remember: ACCD, alone, has over $500 million in Outstanding Debt and Principal and Interest Payments.
Why should you help it add another $450 million to its existing debt?
In the end, you’re responsible for paying it out of your own pocket, a repair-and-expansion project that only four percent of San Antonians will ever use or have access to.
Let’s not forget that you’re already on track for the next two decades to pay off ACCD’s current debt of $500 million.
Imagine again how much longer (and how much more in taxes!) you’ll need to pay after PROPOSITION 1 passes.
Fortunately, legislation exists to prevent Alamo Colleges from exceeding $0.25 per $100 taxable assessed valuation for maintenance, operations, and debt service purposes. But TAKE NOTICE that your current Ad Valorem Tax Rate for ACCD is $0.149150 for every $100. It’s already over the halfway point.
Here’s what to expect in a few years:
Alamo Colleges will periodically levy and assess its outstanding and unpaid bonds to determine how much it should tax you so that ACCD can pay off its outstanding tax debt obligations.
Right now, it’s $500 million, but should you approve PROP 1, that amount will soar to $950 million, nearly a billion dollars.
Moreover, as the assessed valuation of homes and properties go up in Bexar County, ACCD will undoubtedly continue to push the limits of its tax revenue source.
PROPOSITION NO. 1 makes the Board of Trustees’ intentions quite clear: To exceed its original ten-year plan at the taxpayers’ expense.
Today, over 40 percent of ACCD’s revenue comes from your property taxes. What’s to stop it from wanting more?
FY15 Operating Revenue Budget
Truth is, ACCD doesn’t need more of your hard-earned tax dollars. It can pay for its own repairs; it can facilitate its own expansion.
In 2015, ACCD generated $420 million dollars in revenue.
In 2016, it generated another $450 million dollars in revenue.
And, as it turns out, the Board of Trustees annually sets aside $14.5 million for preventive maintenance, including (but not limited to) scheduled repairs and periodic upkeep on existing and new buildings. If they wanted, they could significantly increase their own preventive maintenance budget to cover what’s outlined in PROPOSITION 1.
They shouldn’t be asking you, the taxpayers, for a $450 million municipal bond.
Yes, admittedly, projects would take longer to complete, but at least Bexar County families wouldn’t have to endure higher property taxes for the next ten or twenty years.
Simply put, with a projected enrollment rate of just 3.4 percent, ACCD fails to justify the immediate need for a $450 million expansion-and-repair project. Such extravagant spending only raises its “preventive maintenance” costs and adversely affects the lives of 1.05 million San Antonians.
If ACCD’s goal is to “renovate existing facilities, add new facilities, and expand geographic reach,” it should adaptively allocate funds based on where it is now, not where the ACCD thinks it will be in the distant future.