Is ‘zero tax increase’ possible with proposed Wichita school bond issue? Here’s what we know

Wichita Public Schools voters could soon be asked to support a $450 million bond issue proposal that would pay for the rebuilding and consolidation of schools across the city.

In most cases, bond issues are pretty simple. Voters are asked to sign off on raising property taxes to support new buildings or upgrades.

But school officials and consultants hired by the board are calling this proposal a “zero tax increase” bond issue.

So, what does that mean?

For Wichita school voters, USD 259 appears several times on Sedgwick County property tax bills. One of those items is labeled “bond” and collects tax money to pay off debts associated with the last bond issue in 2008, when voters narrowly approved a $370 million package.

If voters supported a new bond proposal, their current USD 259 tax rate would remain unchanged. They would essentially be agreeing to maintain the rate associated with the 2008 bond for however long it takes to pay off $450 million in additional debt — likely another 20 years, Superintendent Kelly Bielefeld said Monday.

However, if voters rejected the bond proposal, Wichita school taxes would be set to go down in 2028, when the last of the 2008 bonds is paid off.

Taxes are calculated by multiplying a percentage of the appraised property value — 11.5% for residential properties and 25% for commercial and industrial properties — by each taxing jurisdiction’s mill levy and dividing by 1,000. For example, under USD 259’s current combined mill levy rate of 51.954, the district would collect $519.54 in property taxes on a $100,000 home.

If current property valuation trends continue, taxes associated with Wichita schools would likely climb in coming years — even if the mill levy stayed flat. Property tax owners would pay more as the value of their home rises over the years.

A bond question will appear on the ballot only if the school board votes to add it and the state board of education signs off. The deadline to get a question on the November ballot in Sedgwick County is Sept. 2.

After Monday’s school board meeting, David Sturtz, a board consultant with Woolpert, said the new proposal could be financed without raising the property tax mill levy because rising property valuations over the last 16 years have generated additional revenue.

“You passed a bond in 2008. Since then, you’ve been paying off the bond but your property taxes have been increasing,” Sturtz said. “That opens up the amount of money the district can borrow without having to ask the voters for a higher tax.”

Sturtz told school board members that the district’s deferred maintenance needs will only become more dire without the passage of a bond issue, and said a proposal to sustain the current mill levy rate would be more popular with voters than any option that raised the tax rate.

“We believe that it is the best strategy for you all to go for a bond that is not a tax increase to start with,” Sturtz said.

But he also suggested that a successful round of capital investment could be used to justify more bonds in the future.

“You can go forward and get a substantial chunk of the work done at no tax increase, and the proof will be in the pudding for you,” Sturtz said. “Here’s what we said we were going to do. We did it. It’s working. Now let’s talk about the next step.”

School board Vice President Diane Albert said she’s eager to hear what community members think of the facilities master plan draft proposal, which calls for the district to reduce its overall footprint by 11 buildings, rebuilding eight schools and consolidating programs into new and existing facilities.

“How do we use our funds in a fiscally responsible way to meet the needs of our students and the needs of our community? I think they laid out a pretty good plan, so I’m hopeful to see from the public what their responses are,” Albert said.

The district is collecting feedback through an online survey that will remain open through June 20, a week before the next meeting when the school board will be presented with the final facilities master plan recommendation.

This story was originally published June 12, 2024 at 5:33 AM.