School Facilities Commission suggests keeping piggyback tax for construction Levy would be used to pay debt over years

April 09, 1997|By Anne Haddad | Anne Haddad,SUN STAFF

An ad hoc commission has concluded that the "most practical and prudent" method of financing school construction in Carroll County is to continue a piggyback tax, but to use it differently.

The School Facilities Commission, appointed by the County Commissioners in February, has recommended selling bonds to finance school construction, and using revenue from a piggyback tax (Carroll's share of the state income tax) to pay the debt over several years.

Not everyone agreed.

William Drumm of the Carroll County Taxpayers Association said he prefers financing school construction by cutting spending and charging families user fees for school buses, athletic participation, parking, and other activities and services.

With bonds paid off by a piggyback tax, he said, you pass along the debt to your grandchildren.

"You also give them the school facilities," said Susan Krebs, a mother of three and PTA member from Freedom Elementary and Oklahoma Road Middle School.

When Commissioner W. Benjamin Brown proposed that a school facilities commission be formed, he had hoped its primary role would be to look at funding alternatives to replace the 16 percent increase in the "piggyback tax" that he and Commissioner Donald I. Dell approved in 1995.

Brown and Dell raised the piggyback rate from 50 percent to 58 percent in May 1995. The more than $7.5 million in new revenue each year was to be used in conjunction with state aid to build several schools by 2001. But the plan is no longer viable, because expected state aid has not been forthcoming.

Brown wanted to repeal the tax increase earlier this year, but the county's legal department told him his proposal was too late to take effect this year.

The piggyback tax revenue is to be used to pay as schools are built, rather than to pay off bonds. Floating the bonds would spread the burden over several years so that one generation wouldn't pay the entire cost for a school that several generations would use, members said.

Although opinions varied among members of the commission over how much the piggyback tax should be, they concluded it wasn't their place to recommend a specific amount. The County Commissioners had asked them to recommend methods, not specific dollar amounts.

Drumm preferred no tax. Other members said something lower than the 58 percent rate might be more realistic for the long haul.

"You have to keep the tax revenue as high as people will accept it, but as low as possible," said C. Scott Stone, president of the school board and a member of the commission.

Others, such as Bernie Schisler, said the commissioners should keep the piggyback tax at 58 percent, because they'll need the revenue as enrollment grows and more schools are needed.

Schisler, a Carroll resident who owns Craft Construction in Baltimore and has built schools all over the state, said the county can use some of the tax revenue to pay as it builds in the early years when the debt service is small. As projects increase and loan payments go up, the money can be used 100 percent for debt service, he said.

"If you don't [keep the current tax], the commissioners are going to have to go to the well three or four years from now," Schisler said.

The commission has met eight times since February, chaired by Louna Prem, vice president for lending at Carroll County Bank and Trust. Members include planning and zoning commissioners, school board members, parents, local college officials and business people.

Pub Date: 4/09/97

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