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LTTE: Recommends School District reduce tax burden during financial crisis

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Published [post_published]

In view of the extraordinary events unfolding in 2020, I am wondering if it would not be prudent for the Ferndale School District to seriously consider rolling back plans to saddle taxpayers with the full amount of the $112M bond (plus interest). Bearing in mind that the bond proposal required two votes and barely passed the minimum approval threshold, I am suggesting serious reconsideration of plans due to the following recent developments:

  1. The COVID-19 pandemic will clearly reduce forecasted City of Ferndale revenues in coming years. This will create pressure to raise per capita city taxes and fees other than education (e.g., water).
  2. Major layoffs have been announced at Intalco. This will seriously affect the wealth of the City’s tax base.
  3. Because of the pandemic, many of Ferndale’s small and medium businesses will either close or reduce operations and employment. This will also negatively affect the wealth of the City’s tax base.
  4. More business and consumer purchases are being made online, which trend will likely continue after the recovery. This will reduce local retail sales, with related reduction in employment and sales tax revenue.
  5. The pandemic has vividly introduced the concepts of “essential” and “non-essential”. I suspect there are many “non-essential” elements in the FHS (and FSD) spending plans.
  6. The shutdown of schools was very revealing:
    1. The traditional education system was not at all prepared for non-classroom or alternative learning models. Many teachers obviously “spun their wheels” with full pay and benefits.
    2. Many private alternative education models gained favorable notice due to their innovative approaches.
    3. Many parents were forced to cope with new realities and to research alternatives. How many will return to the old system? Will classroom attendance be as high as forecast?

It seems abundantly clear there will be a serious increase of per capita taxes and fees in the coming years, which will fall on taxpayers who will have less ability to pay. It also seems abundantly clear that businesses and individuals will develop new and different purchasing habits, including for education. Consequently, I believe it would be very prudent for the FSD to formally and transparently review and lower all spending plans (and levies) for at least two or three years pending clarity on the “new normal” for both projected enrollment and “essential” education needs.


Jim Pettinger

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