BURKEonBOARD

(Oct. 14, 2008) – We learned some interesting new information at Monday night’s school board work session about the prospective OPEB bond sale and accompanying tax increase. (Too bad you couldn’t see it for yourself because the school board forbids those meetings from being carried on the cable.)

Last night the board got a handout from district finance director Jeff Priess with lots of new information and cost projections going out 40 years and some very scary numbers. It included liability numbers that still wouldn’t be covered by the OPEB bonded trust fund, numbers approaching $1 million/year out past 2020.

In case you’re not up on what the OPEB issue is all about, please get up to speed by reading this. The short explanation is OPEB (Other Post Employment Benefits) is about the future liability the school district has for contractually mandated retiree health insurance benefits and how to pay for it. The district is considering selling bonds (and raising taxes to pay for the bonds) next year to fund a trust that would pay that liability going forward rather than paying for it on a pay-as-you-go basis as it does now. The concern is that OPEB liabilities will escalate from the current year $320,000/year to more than $2 million/year in years beyond 2020. (I’m not sure of the exact figures because the district has not provided me with the actuarial study all this is based on even though I asked for it a couple weeks ago.)

I guess scary is the operative word here.

We’re looking at some daunting figures. But there is also lots of uncertainty about the nature of the liability and a complete lack of perspective about the future context of this liability.

Please keep in mind, we’re talking about liabilities 20 and 30 years out but we’re discussing them in the context of today’s tax and revenue figures.

To gain back some perspective, look back 20 years. If someone told you in 1988 that your four bedroom home was going to be worth $250,000 to $350,000 today and your property tax bill was going to be over be $4000/year, you might have been overwhelmed.

Turn that situation around and look forward 20 years. Place that future OPEB liability in that same kind of future context. Not as daunting a number, is it?

This is not to say that we shouldn’t plan for the OPEB liability, but we mustn’t be stampeded into a tax liability now that we will be saddled with for 20 years.

The bottom line on the OPEB bond sale plan is that it is designed to relieve the district’s operating fund of that burden and move it on to a trust fund filled with the proceeds of a bond sale paid for with a special tax levy that you and I don’t get to vote on.

I say no to the OPEB bond sale and no to a bond tax levy. Pay for the OPEB liabilities as we do now, and if we need more money to pay for it and to run our schools, ask voters for an operating levy that we do get to vote on.