Questions aplenty on LR school bond issue | Arkansas Blog

Questions aplenty on LR school bond issue

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DO THE MATH: School bond issue fraught with peril.
  • DO THE MATH: School bond issue fraught with peril.

The Arkansas Democrat-Gazette today, in article by Cynthia Howell, wrote about the planning and future glories of the  long-overdue new high school for Southwest Little Rock to combine McClellan and J.A. Fair.

What isn't addressed completely are the vexing financial and governance issues underlying a push to deliver this high school. The Walton Foundation's paid lobbyist in Little Rock, Gary Newton, who was among the forces pushing for the state takeover of the district, is quoted as pushing for a refinancing bond issue — and construction of the new high school regardless  — because he knows this is popular with a voter segment. He also knows the peril it holds for the school district and has an agenda that's even more perilous for traditional public education in this city.

I've written before about my reluctance to back a vote refinancing existing construction debt to add $160 million more to pay for the high school and other projects. Such a vote wouldn't raise the millage, but it will extend construction debt payments by 14 years, at a cost of perhaps $250 million dollars. Two problems with that:

1) The decider is the school board, meaning Johnny Key, the state education commissioner, because the district in state control. He's been an advocate of privatization of Little Rock Schools. He's provided no assurances of a return to local control. He's endorsed continued operation of failing charter schools. He's endorsed expansion of existing charter schools that draw hundreds of students — and $6,600 or so in sate support for each lost student — away from the school district.

2) A refinancing of construction debt will commit ALL the $14 million or so in annual construction millage revenue solely to construction bonds. Thanks to past growth in tax base, a significant amount of that revenue now goes to operations. In short, refinancing construction bonds will require new cuts in the operating budget to make up for the lost excess revenue from construction debt.

The loss of 400 students in enrollment this year will hit revenues next year, a drop of some $2.5 million. Add millions more if all debt service must apply to debt and no longer provide operating cushion. If the property tax base continues to grow some of the loss will recouped in time, but a great deal of Little Rock's growth area lies outside the Little Rock School District.

When eStem and LISA charter school expansions are in full flower, another large group of children and the revenues that accompany them will be gone. That, in turn, seems likely to increase the percentage in Little Rock schools of English language learners, poverty children and special education children — all low on the interest scale among charter schools. Categorical support for these children doesn't begin to cover costs.

To quote someone who's studied the issue:

The borrowing of $160 million at this point, without some accommodation for the cuts that are already necessary, the operations cuts needed to fund the additional debt service, and the cuts from enrollment losses seems to be  fiscally dangerous.
This is an argument made, in passing and deep in the D-G article, by former School Board member Jim Ross. He speculates that creation of fiscal distress is just another means to extend state control over the district. You need not agree with this conspiracy theory to agree that the  simple arithmetic is problematic.

Another school supporter — but one who happens to have endorsed the school takeover and the forming plan for a special election on a bond refinance — sees it differently.

What are the options? We can turn the school district over to the charters which I don't want to do. I totally get what is happening with their drain of students, but I have to work with the hand I am dealt and I worry about the kids that will be left and I do not want to abandon them. They will still live here and need a boost. In a refinancing, about half the money would go to build a southwest high school and reprogram McClellan which is a disaster.

I think we have to have a two-prong approach— preserve our facilities and create new facilities that will also bring efficiencies and maybe begin to attract people back or we just give up. I am not ready to give up and no matter what, the experts tell me that we will still need to service about 20,000 students if there was further drain. They may be the more difficult students but we have to do something. I am against continually renewing charters that are failing and don't know what that is about.

I have Asa, a state board and a few other things I obviously cannot control. What do you do? I just keep moving in hopes that we can gain some stability and a path that shows promise and progress in spite of the obstacles. I  just can't see doing nothing and the refinancing sounds reasonable. Some of your and my more moderate to liberal friends wish there could even be a millage increase, but I don't see that happening right now.
And there you have the dilemma. The district needs more money — even a tax INCREASE, which I'd happily support if I didn't think the state education leadership that controls the district ultimately plots for its demise.  Some promises from Johnny Key on return of control and equity in accountability — no takeover of Little Rock while failing charters are allowed to operate and expand, for example — might change my outlook. But history suggests no reassurances will be forthcoming. And many in the legislature are spoiling to destroy the Little Rock School District.

Bottom line: I fear and loathe the idea of putting a quarter of a billion dollars of tax money into new schools destined to be taken over by private, unaccountable charter school management corporations.


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