Tuesday, August 30, 2011

Leander ISD's Negative Outlook

While Americans have become much more cognizant of government debt at the national level, they are less aware of government debt problems at the local level.  In some areas these debt loads are beginning to inflict further pain on communities already struggling in the 'Obama' economy.

Earlier this year I wrote about what I referred to as a looming crisis for the Leander Independent School District, and more recently Owen Stroud published an excellent analysis, "Leander ISD:  In the Shadow of Debt."  The bottom line is that district leadership and the paltry few who vote in ISD elections took on over $1.2 billion in bond debt, resulting in debt service costs of $56,828,366 last year and one of the highest ISD property tax rates in the area. 

While our concerns about LISD finances have been dismissed by some board members and district apologists, conservative journalists are not the only ones alarmed by these trends.  As reported by Business Wire earlier this summer, the Fitch Bond Rating service downgraded LISD's Rating Outlook to 'Negative.'

Fitch considers the district's debt levels very high. Overall debt levels approximate 13% of market value and $15,600 per capita, which are well above average for the current rating category. In addition, amortization is slow, reflecting in part the use of capital appreciation bonds (CABs) to minimize tax rate impacts and shift the debt burden to future taxpayers. Approximately 38% of the district's direct debt is retired in 10 years on a non-accreted basis. Annual debt service represented almost 21% of general government spending in fiscal 2010, and annual payments as currently scheduled increase by 18% by fiscal 2013 and by 37% by fiscal 2015
The current LISD Board seems to be struggling to cope with the financial mess, and tax hikes are definitely in the works.  New board member Aaron Johnson has proposed some plans to restructure debt, which may help slightly, but as Stroud notes in his article,  the "previous reckless decisions will continue to haunt" for years to come. 

One possible action on the part of LISD Board is cause for concern.  It seems the LISD is considering purchasing additional property to build another middle school.  This is not likely to go down well with taxpayers, since the district already has two brand-new school buildings sitting empty for a second year.  There will be a Special/Joint meeting with the City of Cedar Park on August 30.  (Such meetings are relatively routine, as there must be cooperation between the two entities regarding new construction.)  It will be interesting to see whether the ISD really has purchase plans in the works. 

The district will rebuff criticism of any new purchases since the funds likely come from previously issued bonds, and they will say they are planning ahead for future growth.  However, in light of the current challenges faced by LISD, spending millions on new land and construction hardly seems prudent.  And while districts separate budgets for M&O (Maintenance and Operation) and I&S (Interest and Sinking funds,) at the end of the day all of these funds, including debt service, will come from taxpayer pocketbooks.

Hopefully the elected LISD leadership has realized they simply cannot continue 'business as usual.'  If they do not change these patterns, the outlook will be worse than 'negative.'  It could be disastrous for residents and the local economy. 

Wednesday, August 24, 2011

Major Donor to Wilco Democrat Arrested

It seems one of the major donors to Williamson County Democrats was arrested this week.  Marc Rosenthal is an Austin attorney who took a keen interest in promoting Democrat candidates, especially one in Williamson County.  According to the Texas Ethics Commission, Rosenthal gave former State Representative Diana Maldonado (HD52) $51,000 in contributions, as well as another $7,000 in "Air Travel" donations.  Back in 2008, local observers had noticed that Maldonado seemed to spend an unusual amount of time traveling around the state on Rosenthal's private jet.

According to news reports, Rosenthal was arrested on "federal racketeering charges alleging bribery of an already-convicted judge as well as witnesses in state and federal cases."  Rosenthal seems to be tied to the scandal with former state district Judge Abel C. Limas, who pled guilty to racketeering charges last March.

Representative Maldonado was certainly not the only recipient of Rosenthal's money.  He gave to various other Democrat candidates, County Democrat parties, and the Texas Trial Lawyers Association, but those donations run between only  $150 and $5,000.  Clearly, at $58,000, Ms. Maldonado was his hands-down favorite. 

Tuesday, August 23, 2011

Two New GOP Candidates to Run for Williamson County Attorney

Two Williamson County men have announced their intention to run for County Attorney in the Republican Primary next year.  They will face incumbent Jana Duty, who has been much in the news locally.  Duty's former Assistant CA, Hal Hawes, who is now legal advisor to the County Commissioners Court, sent out a press release last week.   Rick Kennon, a Family Law attorney and former Assistant Travis County Attorney and Assistant Attorney General,  has announced at various GOP meetings that he plans to file as well. 

In light of all the difficulties between incumbent Duty and the other elected officials in the county, this is likely to be a very unpleasant Primary battle.

Below is the release from the Hal Hawes campaign.

Hawes Announces

Tuesday, August 16, 2011

The Truth About Texas

Whew, since the Governor of the economically strongest state in the nation (that's Texas, folks,) announced his candidacy for President, the big government guys have been trying to deconstruct the Lone Star success story.  Happily, Kevin Williamson of National Review has a great rebuttal to Paul Krugman's false claims about employment and wages in Texas. 

Houston, like Brooklyn and Boston, is a mixed bag: wealthy enclaves, immigrant communities rich and poor, students, government workers — your usual big urban confluence. In Harris County, the median household income is $50,577. In Brooklyn, it is $42,932, and in Suffolk County (which includes Boston and some nearby communities) it was $53,751. So, Boston has a median household income about 6 percent higher than Houston’s, while Brooklyn’s is about 15 percent lower than Houston’s.

Brooklyn is not the poorest part of New York, by a long shot (the Bronx is), and, looking at those income numbers above, you may think of something Professor Krugman mentions but does not really take properly into account: New York and Boston have a significantly higher cost of living than does Houston, or the rest of Texas. Even though Houston has a higher median income than does Brooklyn, and nearly equals that of Boston, comparing money wages does not tell us anything like the whole story: $50,000 a year in Houston is a very different thing from $50,000 a year in Boston or Brooklyn.

Read the rest of Williamson's article here.  (Link should work now-sorry 'bout that.)

Tuesday, August 9, 2011

Taxpayers Beware: Local Budget Season is in Full Swing

Don't kick me when I'm down...

Ah, the Dog Days of Summer, when Texans must not only cope with excessive temperatures, but also the trials and tribulations of local government budgeting season.  In Williamson County our various school boards and cities, as well as the county government, are making budget plans for the next fiscal year.  Unfortunately, some of these budget proposals  include tax increases for local families already struggling for survival in this difficult economy.

Leander ISD:  Upon discovering that state budget cuts were not so drastic after all, some board members have chosen to back away from planned cost-savings measures for the district.  Instead, possible tax increases for LISD residents are on the table.  Although last year's 3.2 cent increase (per $100 of valuation) put LISD amongst the highest in the area, the Board is considering another increase of 4.6 cents; putting them at a whopping rate of $1.49.  The Board will allow public comments at the August 18th Board Meeting, scheduled for 7PM at the Cedar Park Middle School Cafeteria. 

Round Rock:  The City of Round Rock is planning to increase its property tax rate again this year, from 41.728 to 42.321.  By a 5-2 vote in 2010, the Council increased the rate from 39.661.  Of course, this is called 'balancing at the effective rate.'  The city says that property valuations are down, so if they don't increase the rate, they will collect less property tax revenue next year.  Interestingly enough, the Williamson County Appraisal District has indicated that property values are actually up this year.  Most of the Round Rock homeowners I know are very upset about the significant increase in their home valuations this year.

The City website tells us that there will be "no proposed increases to retail water and wastewater rates," but every Round Rock homeowner knows his/her water bill has increased this year.  In my own household, although we used 2,000 fewer gallons of water in May 2011 than 2010, our water bill increased by 25% due to new fees and charges. 

Overall, the general fund budget is slated to increase by 2.4%; the increased funds will go to street maintenance and employee raises.  Round Rock City Council members will discuss the budget at their retreat August 16-17, and plan to vote on the tax rate and budget at the September 8 and September 22 meetings.  Contact information for Council Members is available here.   Council Meeting information here.

And of course there is Williamson County.  Last year, despite intense lobbying from the Wilco Employees union, the Commissioners unanimously voted to keep the tax rate steady, a decision for which they have endured relentless and very personal attacks.  The 2011-12 budget as presented by the County Budget Officer calls for an additional $5.19 million in spending over last year and includes new voting machines, new hires, and employee raises.  As the Austin American-Statesman reported,  "Commissioners don't yet know how they will pay for all of it."  Commissioners will discuss the tax rate at the August 9 meeting, and vote on the budget August 30. 

Spending increase proponents will all claim that these increases are necessary and essential, and some of them are.  The problem is that taxpayers in the private sector have a lot less to contribute.  According to the U.S. Department of Commerce, personal income has steadily decreased since 2008, and while private wages decreased by $2.2 billion in June of this year, personal taxes increased by $2.3 billion during the same period.  Now with the U.S. debt-rating downgrade, widespread unemployment, and market losses in recent days, there are no signs of relief in sight.  Sounds like us private sector folks are going to get kicked while we're down. 

One particularly bright spot in Williamson County is the City of Cedar Park; for the second year in a row, the Cedar Park City Council has crafted a truly conservative budget with no proposed tax increases.  Kudos to these guys on the CP Council, perhaps they should conduct seminars for some of the other muncipalities.  Round Rock ISD will keep taxes at the same rate, but Hutto ISD, which has been struggling financially, is considering a 5-6 cent increase to be approved by voters. 

If you are concerned about the proposed tax increases for your family, I strongly encourage you to contact these elected officials and attend meetings to provide testimony.  You do not need to be an attorney, we're not running around suing people here, our leaders just need to hear from the community.  And please be courteous and polite; Williamson County is in strong need of a return to civil discourse. 

Tuesday, August 2, 2011

School Accountability Ratings Are Misleading

Each morning, wanting to believe in our schools,
we take a leap of faith.

-Davis Guggenheim, Waiting for Superman

The TEA release of school and district Accountability Ratings for 2011 last week led to much hand-wringing in Texas.  The number of school districts rated 'academically unacceptable' jumped from 37 districts in 2010, to 88 in 2011; those rated 'exemplary' dropped from 241 to 61.  These drastic changes caused many to wonder what had happened.

The short answer is "nothing."

Many parents and community leaders were completely unaware that for the past two years districts had been masking performance results with something known as the Texas Projection Measure. The TPM allowed schools and districts to interpret TAKS results in some rather creative ways. While there is a formula one must follow to apply the TPM, essentially it permitted schools to deem students as 'passing' when they had actually failed the test, if the school 'projected' the student would pass in the future. I have heard several contorted arguments in support of the measure, but the bottom line is that the TPM was used to hide actual results of student testing.

Of course for those who have been paying attention, even higher test results are not necessarily encouraging, since it is no secret that many schools are 'teaching to the test.'  A friend of mine, who formerly taught in Leander ISD, described to me how her school paid for an expensive TAKS 'coach' to guide teachers in an attempt to boost results.  Teachers in that school spent as much as six weeks teaching nothing other than TAKS strategy.  The school did indeed boost results, but when the administration praised the staff and announced a celebration party, my friend quietly refused to participate. "We did not teach those kids anything," she says.  "We failed to educate them."  Not surprisingly this former teacher has chosen not to place her own children in public schools.

Standardized testing is an attempt to provide a measure of accountability for our schools, and accountability is essential.  These tests, however, do not address the fundamental problems with our current system. 

While it is certainly a worthy goal to provide educational opportunity for every American child, somewhere along the way we decided that there is a 'one-size-fits-all' model of education.   The problem is that children do not come in only one 'size.'  We know there are a variety of learning styles, different rates of physical, intellectual, and social maturation, and a multitude of background cultural references.   Even the very best of schools cannot possibly meet the needs of every child.  Assigning children to schools based on zip code is a recipe for mediocrity, if not disaster.     

There are numerous other problems in the current public school system, not the least of which is the burden of the 'bad teacher.'  These 'bad' teachers are known to both school administration and co-workers, but because of the power of teacher unions, it is nearly impossible to fire them.  Instead, as described in the excellent documentary Waiting for Superman, districts simply engage in the 'Lemon Dance,' and continuously move these 'lemons' from school to school. 

We need serious reform in the way we structure education, and obviously the answer is not 'more money.'  Per pupil funding, adjusted for inflation, has increased by over 50% since 1970, but academic achievement has remained statistically unchanged.   And while some educators plead for more parental involvement, our current system tells parents that they are not responsible for their own children's education and do not allow parents to make determinations about schools.   The elitist attitude of many educrats is "We know what is best for your children," and even elected school boards routinely reject measures to give parents more choices and control.

Documentaries like Waiting for Superman, The Lottery, and The Cartel, (also excellent,) are helping America become more aware of the inherent problems in the public education status quo. These films show that the difficulties are not limited to urban schools.  In Waiting for Superman, which profiles children desperate to escape their assigned public school, one child is from a suburban, white, middle class district in northern California.  Her assigned public school was Woodside High, a highly ranked school with a large, modern Performing Arts Center, and new library and athletic facilities.

Here in Williamson County, some of the community might have been surprised to discover their school is no longer 'exemplary,' or even 'acceptable.'   The deception perpetrated by the Texas Projection Measure was unjust and parents are rightly disappointed.  Parents should also know that half of Texas High School graduates who attend college will need remedial courses.  Perhaps these revelations will lead to more parents investigating public education and demanding the right to choose the school best for their own child. 

As policy analyst Jennifer Marshall notes:  "Public education should describe a goal (an educated citizenry), not prescribe a means (a government monopoly school system dominated by unions.)"


Looking for some solutions?  Check out Jennifer Marshall's commentary, Texas Education Reform, and Florida's Success Story.