Fri August 30, 2013
JCPS School Board Member David Jones Jr. Talks Tax Increases, Says More Restructuring Needed
Jefferson County Board of Education member David Jones Jr. says although the board’s recently approved tax increase will bring in new revenue, real savings and supports will come from making the district more efficient.
In a Business First article, Jones lays out his reasons for supporting the 1.4 percent tax increase, which will bring in around $8 million in new revenue for the district. The board approved new tax rate 4-3 earlier this month after Jones denied the larger tax JCPS administration recommended and then made a motion to approve a lesser tax.
(Jones discusses his reasons for supporting the tax increase and the future of funding education with WFPL’s Devin Katayama)
Jones says there are two takeaways from the tax increase.
One—and what Jones says is the most important—is a warning that the state’s pension system is going to impose a huge cost on JCPS and all school districts. The unknown pension obligations is an issue Jones has addressed at prior school board meetings and he calls it the “elephant in the room.”
Kentucky’s pension system—which has been called one of the worst managed systems in the nation—has been criticized by many for being ignored far too long. Jones says funding decisions were made by lawmakers who have since left, but who the current generation will have to deal with.
JCPS officials addressed the potential for costs associated with the state’s pension system at a school board meeting earlier this year. Chief Financial Officer Cordelia Hardin said the district’s obligations could be anywhere between $200 million and $1.5 billion, which would have to be paid over a period of several years.
“I think it’s important to sound the alarm on that,” Jones says, adding the pension obligations will be more money than the district can handle given its current revenue streams.
“There is no possibility that that could be funded out of regular operational financing and the kind of property tax rates that we have today," he says.
But Jones says his decision to raise taxes wasn't based on these future obligations, rather an agreement previously reached by the board and teachers union to fund salary increases.
Jones also says “quality costs money.”
In order to continue seeing results, the community will have to invest, he says.
For example, the overall growth rate for expenditures in JCPS has been approximately 3.9 percent, he says. The approximate growth rate in salaries has been around 4 percent for that same period. Also the growth rate in Louisville—during the recession years—has not been that high, he says.
“When costs exceed the growth rate and the rest of the economy you wind up with an expense structure that eventually citizens rebel against, which they should in my view," he says.
JCPS also faces a challenge to operate as efficiently as it can, Jones says.
“We’re not going to get where we want to be in terms of more resources in the classroom without big tax rate increases, unless we can restructure the way the operations work,” he says.
This will be difficult, intellectually challenging, and will involve new technology, he says.
The new JCPS board—which added three new board members this year—has taken some important steps in the right direction, including the new teacher’s union contract that included a smaller increase in personnel costs, Jones says.
Jones—whose experience is in healthcare and who sits on the board of Humana—says the way central offices operate in the private sector has changed.
“I suspect that will have to come to JCPS. It doesn’t have to be dramatic,” he says, and points to simple things the district has done recently to meet the demand for quality, like implementing online enrollment this year for families.