CPSB Debt Would Top a Quarter-Billion Dollars …


Business Sharksby Elliott Stonecipher

(This is one in a continuing series of articles concerning the Caddo Parish School Board property tax millage proposition set for a May 2, 2015 election.  If approved by voters, CPSB nets another $108,000,000 for new schools and other buildings.)

New research confirms that Caddo Parish School Board debt will rise to more than $250,000,000 if voters approve the tax plan set for a vote next month.  The debt total is far higher than school board members and top staff acknowledge in their current campaign in favor of the tax and debt plan.   

The tax plan includes nothing for instructional programs or teacher and other employee pay, and instead is designed around the construction of new schools in Southeast Shreveport, Blanchard and Central Shreveport, at a combined cost of $56,820,000. A long list of additional brick and mortar projects runs the plan’s total taxpayer tab up to $108,000,000 in new debt.Elliott_Stonecipher   

The school board and staff are not saying why the list of building projects have not and will not be funded by existing, related categories of property taxes, including Maintenance & Operation, Special Renovations, and Operation, Maintenance & Support.  From this new research, we now know these projects might also have been funded with the recent windfall of money from President Obama’s 2009 “stimulus” program.

Rotten Apple
“Rotten” core!

The Facts About The Debt We Now – and May Additionally – Owe 

A core part of the CPSB’s public pitch for this new load of debt is, (a) the system has “only” $92,000,000 in bonded debt, and (b) that amount is miniscule in comparison to how much money the law would allow the board to borrow.

In fact, the system’s most recent Comprehensive Annual Financial Report – the 2014 report is here – finds its current debt total is actually a notably higher $123,961,505.  (Scroll to browser Page 128 for the “Caddo Parish School Board Direct Debt” amount.)

In major part, what is missing from the supposed $92,000,000 debt figure used by pro-debt campaigners is $28,651,928 in “stimulus” funds the system borrowed between 2009 and 2011.  The applicable categories of this debt (see details here) are “QSCB,” Qualified School Construction Bonds, and “QZAB,” Qualified Zone Academy Bonds. 

This debt is, effectively, interest-free, but the principal must be re-paid.  The QSCB loans are to be used specifically for such projects and costs as those in its current tax and debt plan.  We do not know where it was otherwise used. 

Quarter-Billion-Plus Total

A single page in the Comprehensive Annual Financial Report, linked above, explains and quantifies the debt Caddo property tax payers will owe if the current plan is approved.  On Page 60 of the report (browser Page 67), all debt is listed.  The two columns at the right show debt principal and interest owed through 2033, listed by the year it is due:

HeavyTaxBurdena.  principal owed on debt already incurred totals $123,961,505,

b.  interest payments owed on debt already incurred will total $30,851,439, and

c.  the current tax plan adds $108,000,000 in new debt principal.

d.  The amount of interest owed on the $108,000,000 must be added, but cannot yet be calculated.

If the tax plan passes, the debt total is $262,812,944, before adding interest owed on the new debt of $108,000,000.  All such debt must be paid by Caddo property tax receipts.

The Way We Were

In an earlier and more responsible time – when private and public debt was a necessary evil to be minimized – such levels of local government borrowing was unheard of. 

For example, some of us well remember when the Caddo board built three new schools in the 1980s:  Turner Elementary in 1984, Keithville Middle in 1988, and Donnie Bickham Middle in 1989.  Using statistics from Louisiana Department of Education Bulletin 1472 for the period 1984-1989 (first annual report in the series here), we see how dramatically different – and much lower – taxpayer debt for our public schools was, even during building programs for new schools.

Follow the map!
Follow the leader!

…  Total system enrollment in 1984-1985 was 50,758, and rose to 51,912 in 1988-1989.  Today enrollment is near 41,000, a count which includes a broader age-range of students than in the 1980s.   

…  In 1986, during this building program, Caddo Parish population peaked at 264,653.  We now have 12,150 fewer residents.   

…  Then, Caddo residents voted their strong support for improvement in education quality with increases in both our public school sales tax, from 1.0% to 1.5%, and our system’s dedicated property tax millages, from 35.87-mills to 54.52-mills.  

…  By 1984, in preparation for upcoming additional borrowing, the CPSB reduced its debt to $2.4 million, or $5.2 million in today’s dollars.  REPEAT:  Just over $5,000,000, inflation-adjusted.  (All such following amounts are also inflation-adjusted.)

…  As school construction progressed during this five-year period, our total debt rose to $79.4 million by 1987, and had already been paid down to $67.4 million by 1989.

If the current tax plan is approved, total school system debt will be $232.0 million.  That is $152.6 million 192.2% higher than the 1989 debt total of $67.4 million.

Directly put, Caddo residents and taxpayers face non-stop barrage of debt and spending increases, regardless that our population is dropping, our public school system’s enrollment is 20,000 lower than in 1969-1970, and that we have at least as many school buildings as then. 

Regardless of any of that, our property tax total for our public school system is now 75.66-mills, up 38.8% from the 1989 levy of 54.52-mills

Given all of this, would someone please explain why our school board and administration’s response is to build more schools … and nearly double our debt?

Elliott Stonecipher

(Elliott Stonecipher is in no way affiliated with any political party.  He has no client or other relationships which in any way influence his selections of subjects or the content of any article.  His work is strictly in the public interest, with no compensation of any kind solicited or accepted.  Appropriate credit to Mr. Stonecipher in the sharing – unedited only, please – of his work is appreciated.)