School Tax Increases Are Higher Than What School Officials Claim
Here is my annual complaint about my school tax bill in Carmel
The Board of Education’s budget stated that the 2.6 percent increase in the total tax levy would result in a $240 tax increase for a house assessed at $350,000. They lied!
My taxes went from $6,166 for 2019 to $6,523 for 2020 – up by $357 or 5.8 percent. My assessed value is $329,500.
Somehow, the 2.6 percent increase in the tax levy produced a 3.8 percent increase in the tax per $1,000 of assessed value – from $27.49 per $1,000 last year to $28.58 per $1,000 this year. How do they do that?
The items which affect my school tax bill are:
- Assessed value of my home. That did not change in 2020. I don’t have the details, but I am certain that the aggregate assessment of all property in the Carmel School District would have risen in 2020, due to new building and renovation. That should have reduced my individual property’s share of the tax levy.
- School budget. That increased by 2.26 percent, but other revenues leave the amount to be raised by property tax to $98.6 million, an increase over 2019 of 2.6 percent.
- STAR exemption. I am fortunate to qualify for the Enhanced STAR Exemption of $2,823, but that is unchanged from 2019.
As in previous years, enrollment in the schools has declined, from 4,052 to 4,027.
What really troubles me is that the school district’s most recent financial statements (from June 30, 2019) show that it has an overall deficit of $181.6 million, which means it’s insolvent and represents a future tax bill for property owners. The reason for the deficit is the unfunded liability for “Other Post-Employment Benefits.” These are health care and life insurance benefits promised to retired employees and their dependents for the rest of their lives after retirement.
That unfunded liability, which reached $212 million in June 2019, more than wipes out all of the assets and reserves of the schools. Unless the world comes to an end, which no doubt the school administrators are counting on, that liability will have to be paid by future taxpayers. The liability increased by $19 million in 2019, despite the payout for 516 presently retired employees of $6.7 million (presumably included in last year’s budget for “medical insurance” of $19.6 million). There are 586 current employees who will retire in the future and are accruing these benefits.
It is this type of future obligation that the federal government forced the U.S. Postal Service to pre-fund that has caused the massive losses at the post office.
Yours truly,
Cliff Narbey
Carmel
