Our View: Fund Board needs healthy reserves
February 20, 2008
Steamboat Springs taxpayers shouldn’t underestimate the impact the city’s half-cent sales tax for education has had on their public school system. Neither should they underestimate the impact losing that annual source of funding would have on schools in the years to come.
For that reason, we urge the Education Fund Board to continue its long-practiced philosophy of keeping one year’s worth of revenue in reserve. Doing so will allow the Steamboat Springs School District to wean itself from the revenue source throughout several years, should voters turn down a tax renewal this fall.
We acknowledge that keeping up to $3 million in reserve is a risky political move. Some voters, already wary of increasing property taxes, could interpret a large reserve as a sign the Fund Board has more money than it needs and is not effectively using taxpayer dollars.
But that concern is outweighed by the need to ensure a “soft landing” – as Fund Board member Michael Loomis termed it – if the tax isn’t renewed in November. Among the many programs and projects paid for by the Fund Board are more than a dozen teachers and members of the district’s technology department. Those teachers have been on the Fund Board books for years as part of an effort to keep class sizes small – one of the primary reasons Steamboat voters supported the half-cent sales tax in three separate elections.
A brief overview of the Fund Board is warranted:
The Education Fund Board was created in 1993 after Steamboat residents voted in favor of a half-cent sales tax for education. The tax generated about $1.1 million that first year; this year it’s projected to generate $3.1 million. The Fund Board is a volunteer group that oversees the revenues, including voting on which education-related requests get funding and which don’t. Ultimately, approved requests are passed on to the Steamboat Springs School Board in the form of a gift. The School Board must then vote whether to accept that gift.
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The tax was renewed in 1996 and 1999, the latter election calling for a 10-year extension. With the tax set to expire Dec. 31, 2009, a renewal is expected to be put before voters this fall. Fund Board members contemplated seeking renewal last fall, but a survey indicated residents might not be supportive, particularly because of a poor perception of the school district.
Half-cent sales tax revenues are spent almost exclusively on Steamboat Springs School District programs, although the revenues also support a grants writer who works on behalf of the South Routt and Hayden districts. While the revenue-sharing model – or lack thereof – of the Fund Board is a contentious issue in many parts of Routt County, it’s not an issue to be addressed today.
Of more immediate import is the Fund Board’s discussion of reserves. The school district has recommended $4.4 million in funding requests for 2008. Funding all requests would leave the Fund Board with a reserve of about $1.3 million. While that’s no small sum, we disagree with the idea of spending the money simply because it’s in your pocket. Even less agreeable is the notion of spending tax revenues on non-essential projects or programs simply to demonstrate the value of the Fund Board to the residents who will soon vote on its future. A more sensible approach, we believe, is keeping the reserves well-stocked to ensure the most essential Fund Board expenditures, such as teachers to keep class sizes small and pressing capital needs, can continue into the short-term should the revenue stream cease to exist.