Plum School District budget projection shows tax increases for next 5 school years

Plum School District property taxes could increase every year for the next five school years as the district works to fund its operations, pay for a $30 million building project and bring back full-day kindergarten.

District administrators still are working on the $74.1 million 2024-25 budget.

The school board is expected to vote April 16 on the proposed final budget for the coming school year, followed by a final vote May 28 to pass the spending plan.

It is not known when decisions will be made on the building project or borrowing for it, or on a full-day kindergarten program.

Here’s a breakdown of the projected tax increases anticipated in the next few school years:

• 2024-25: 6.2%

• 2025-26: 5.5%

• 2026-27: 5.6%

• 2027-28: 5.2%

• 2028-29: 3.3%

Administrators have proposed a 6.2% property tax increase for the 2024-25 school year. It includes a 5.7% increase to fund district operations and a half-percent increase for the $30 million borrowing that is also being recommended.

If approved, it would increase the district’s property tax rate by 1.3655 mills, from 22.0241 to 23.3896 mills.

For a home at the district’s median assessed value of $116,700, it would increase the annual school property tax bill by about $160, from $2,570 to $2,730, for next school year.

While the district has been reviewing renovations and additions at its two K-4 schools, Pivik and O’Block, and at the district’s middle school, the work that could be done is limited by the district’s borrowing ability.

The findings of a demographics study, presented to the board in February, also will come into play. It predicts increasing enrollment at O’Block and declining enrollment at Pivik.

Based on that data, Superintendent Rick Walsh said no renovations are needed at Pivik.

While needs have been identified at the middle school, it would be difficult for the district to pay for work at O’Block and the middle school at the same time, Business Manager Ryan Manzer said.

So Walsh is proposing borrowing $30 million in three $10 million increments over three years to pay for a project at O’Block to address the capacity issues identified in the demographic study.

“The next steps would be working with HDG Architects to determine a design schedule and construction schedule to determine the timing of the project,” Walsh said.

The district would be able to borrow for another project in 2031, Manzer said.

Breaking down the annual budgets

To pay for the $30 million in borrowing, after the half-­percent property tax rate increase proposed in 2024-25, Manzer’s projection shows 2% tax increases in 2025-26 and 2026-27.

They would be on top of tax increases for the district’s operations, which Manzer projects at 3.5% for 2025-26. That makes the total tax increase 5.5%. For 2026-27, operations would require a 3.6% increase, for a total of 5.6%.

Property tax increases for district operations are shown at 3.2% for 2027-28 and 3.3% for 2028-29.

The district’s state-imposed limit on tax increases could come into play. Manzer said its 7.1% cap for the 2024-25 school year is the highest he has ever seen, and the district should be prepared for it scaling back over time to the more typical range of 3% to 4%.

While borrowing for work at O’Block, the district still needs to maintain its existing buildings, Walsh said. Issues he cited were the asphalt around the high school, the roof at O’Block and the district’s swimming pool.

“We need to be able to maintain our existing structures while moving this district forward,” he said.

Some of the work being considered is to give the district space at O’Block and Pivik for full-day kindergarten. A task force presented recommendations to the school board in January 2022.

While the community favors full-day kindergarten, the challenges are its cost and creating space for it, Walsh said.

“With the proposed addition at O’Block and declining enrollment at Pivik Elementary, there would be available space at both buildings for the board to revisit the full-day kindergarten option during the 2025-26 school year,” Walsh said. “In addition, there are other factors we will need to examine, including staffing, support services and transportation.”

In his projections, Manzer included a 2% property tax increase in the 2027-28 school year to pay for full-day kindergarten. Added to the 3.2% increase for operations, it would result in a 5.2% total property tax hike that year.

School board President Angela Anderson said the district needs to communicate its long-term plan to district residents. Walsh agreed that the district needs to do a better job of getting its message out to all taxpayers.

The school board next meets at 7 p.m. March 26 in the high school library.

Manzer’s budget presentation is available on the district’s website, pbsd.net.