Delaware property boom no boon to schools

Why doesn't the Hilliard school board and administration say this? They need to engage in dialog with Mayor Don Schonhardt and the City Council and quit acting like victims.
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Delaware property boom no boon to schools
Sunday, October 09, 2005
Lee Stratton
THE COLUMBUS DISPATCH

How fast is growth in the fastest growing area in the fastest-growing county of the state?

Residential property values increased 669 percent in one area of Delaware County during the past three years, Auditor Tod Hanks said. Delaware City Schools officials, however, say that such appreciation can be a burden to school finances. The increase was the largest seen in the auditor’s 2005 reappraisal of real estate in Delaware County. The area — Tax District 50 — includes three neighborhoods along the eastern and southern boundaries of the city of Delaware. The total housing value in that area increased from $1.2 million in 2002 to $9.1 million this year.

‘‘At the same time, the value of agricultural land went from $4.2 million down to $589,000, so you can see what happened," Hanks said. ‘‘The housing just exploded."

Since 2002, farm fields have been filled with streets, utilities and houses. As a result, the value of land has increased along with the improvements, he said. Residential property values across Delaware County increased an average of 17.6 percent during the past three years, Hanks said. The higher values will result in property tax increases of about 2 percent to 4 percent on individual tax bills. Despite the rapid growth in home construction, Delaware County trailed Franklin County, where the average home value has increased more than 21 percent since 2002.

The growth is of little comfort to Delaware school officials.

‘‘People see all those new houses and think they generate a lot of new money for the schools. That’s not the case," said Christine Blue, finance director of Delaware City Schools. ‘‘Because of increasing property values, we lose state funding."

State law prohibits schools from collecting more money from a locally voted tax levy than the levy was designed to produce. As property values increase, the collections are reduced to protect property owners from large tax increases. At the same time, Blue said, the state’s school-funding formula reduces state subsidies to schools because the increased property values in a district are viewed as wealth that could be taxed locally. Those reductions are expected to total $800,000 this year. That will leave the district with an estimated $11.2 million in state funds — if the district gains 77 students as expected.

"If those students do not materialize, the state funds will be significantly less," she said. "From where I sit, the revenueflow picture is grim.’ A community task force told the Delaware Board of Education last year that residential development does not pay for the school services it requires, Blue said. "More than eight new houses with no students are needed to fund the local cost of just one new house with one new student," Blue said.
The calculation was based on the taxes generated by a house valued at $150,000 plus the state funding provided for each student. School budgets have suffered because commercial development in the city has not kept pace with home development, she said.

In 1992, for each $100,000 of residential tax value in the school district, there was $128,000 of commercial tax value, Blue said. In 2003, there was just $61,000 of commercial value for each $100,000 of housing value.
"We haven’t lost businesses," she said. Instead, the county has gained houses.

The task force concluded that the tax base isn’t well-balanced and that more should be done to attract new businesses, Blue said. "Businesses pay taxes," she said, "without increasing the school population."

lstratton@dispatch.com