Full report on the Community College Taxing District Facts
Prepared by Various Community Members and
Some Supporters of IdaHope PAC
Andi Elliott, IdaHope PAC Chairman
May 3, 2017
Many IdaHope PAC members, friends, researchers, and other interested parties have spent hundreds of hours collecting data, investigating claims, and researching other similar Idaho community colleges. We have various backgrounds from teachers, Phd’s, landlords, taxpayers, employees and employers. A summary of the research and findings follow.
A previous “Panel Report” was authored from a group based in Rexburg, Idaho, called Research and Business Development Center. We refer to their report as the “The Rexburg Panel Report.” This report will be referred to as “The Bonneville County Panel Report.”
Converting EITC to a community college will offer little new benefit to residents of Bonneville County. Because of the many educational opportunities in the area, including the underutilized CSI-Idaho Falls Campus, The Bonneville County Panel Report group feels such a change is not warranted.
After examining Idaho code, our conclusion is that the initial tax could be many times the $13 per year per $100,000 of valuation promoted by community college supporters. In fact, other Idaho community colleges are charging their property taxpayers some $98 to $112 per year per $100K of valuation. Idaho State code allows community college boards, which are initially appointed and not elected, to set their initial tax rate the first year, but then limits the increase by only 3% annually thereafter. Therefore it is highly likely that the not-yet-appointed board will go for a much larger amount to assure the most tax dollars possible to support their community college.
When the tax rates of the other community colleges in Idaho, namely CSI and NIC which are most like our county, are averaged, taxpayers may expect the College of Eastern Idaho’s board to impose a probable tax of $105 per year per $100K in value. The Bonneville County Panel Report Group is aware that another group has published their “Rexburg Panel Report” with non-binding tax recommendations and they have come to various conclusions.
The Bonneville County Panel Report group has found significantly different data than what was used in their panel report and have come to starkly different conclusions. The Bonneville County Panel Report group believes our data is solid and conclusions correct. Much of this report has recently been published in different sections at the website http://www.whyacommunitycollege.com. Some of the themes and findings are repeated as they came from various committee and community members, and was not assembled by a paid staff.
Our report will show that student interest in community colleges nationwide is in sharp decline and CSI and NIC are both experiencing huge enrollment decreases. Therefore, it is apparent the future of educating those who historically choose a community college will be found online and in alternative training opportunities.
These facts, coupled with the required increases in local property taxes that will likely cost the taxpayer about $105 per year in new taxes per $100,000 in valuation, compel The Bonneville County Panel Report group to recommend rejection of a new taxing district to create the College of Eastern Idaho, and a NO Vote on May 16th 2017.
Table of Contents
1 Community colleges are Evaporating- Declining Enrollments
2 Projected Property Tax Rates of $105 per $100K in Value
3 Who Sets the First-Year Tax Rates?
4 The Eight Types of Property Taxes and Their Limits
5 Community Comparisons with Twin Falls
6 Future Tax Increases – the 128% increase in 7 years at NIC
7 EITC Can Train Right Now
8 Lack of Significant Community Economic Growth
9 Ballot Box Issues and Deception
10 A Community College Could Hurt Local Families
11 A Look At Dual Credits
Community Colleges are Evaporating: Declining Enrollments
Nationwide, community colleges are seeing sharp declines in enrollment. Two out of the three community colleges in Idaho also are seeing huge enrollment declines. The College of Southern Idaho (CSI) experienced about a 1500 student drop while North Idaho College (NIC) had a whopping 2635 student decline in the last six years.
The only outlier to this national trend in Idaho is the College of Western Idaho (CWI) in Nampa, which had both recent periods of enrollment declines and increases. Some enrollment increases were due to the fact that CWI included head counts of dual-enrollment high school students. In 2014 CWI actually had a 10% decrease in on-campus non-high school student enrollment.
CWI is located in the Boise valley with a population of over 1 million people and has experienced a huge population explosion which is expected to continue. This is vastly different from Bonneville County’s population, which has continued with a rather slow, steady population increase. The Bonneville County Panel Report group believes that CWI is located in an area so different that it is an apples-to-oranges comparison to Bonneville County. CWI can’t honestly be used in any comparisons to a proposed community college in Bonneville County. To use CWI’s statistics in any discussion about a college in Eastern Idaho is disingenuous, at best.
On the other hand, CSI and NIC are located in similar population centers and attract students similar to those that a college in Idaho Falls would attract.
The Bonneville County Panel Report group also point to national trends showing community colleges are an educational model that seems to be losing their appeal. Students are electing for more online opportunities and dual credits, which are being provided regardless of whether a community college is nearby. Yet as enrolments fall at CSI and NIC, they receive ever increasing amounts of property taxes which burden local property owners, which will be shown in later sections.
To be sure, shrinking enrolment trends support the fact that community colleges are becoming a thing of the past!
CSI’s 10 year enrollment high was 9086 students. http://magicvalley.com/news/local/csi-enrollment-drops-almost-percent/article_698cb0a3-3d94-5933-8423-2424fc04ff7e.html
CSI’s enrollment has plunged to 7615 students in 2016, which is almost a 1500 student decline. https://www.cappex.com/colleges/College-of-Southern-Idaho
NIC 2011 enrollment was 8982 http://www.cdapress.com/article/20170201/ARTICLE/170209970
NIC 2016 enrollment 6347, a drop of 2635 students in just five years. https://www.cappex.com/colleges/North-Idaho-College
Community colleges are becoming a thing of the past as they see sharp declines in enrollment nationwide https://www.eab.com/daily-briefing/2016/10/24/the-real-reasons-community-college-enrollment-is-falling
CWI has had recent periods of declining on-campus enrollment. This decline was only hidden by dual credit high school students being counted into their total enrolment numbers. See:
Projected Property Tax Rates of $105
Tax costs to property owners near CSI and NIC are significant for their community colleges. NIC was started in the 1930’s and through the years has built numerous buildings. All but one building is completely paid for and the payment there is minimal. NIC’s taxing district, Kootenai County, collects over $15 million per year in local property taxes to keep their college operational. This amount calculates to a tax of $112 per year per $100,000 in property valuation. NIC is in a taxing district with over $13 billion in taxable property. A college in Bonneville County running a similar budget would have a property tax rate of about $ 394.47 per year per $100,000 in taxable value because our taxable value is only about $6 billion, county wide.
CSI has a taxing rate of $98 per year per $100,000 in taxable value for residents in its taxing district of Twin Falls County. CSI’s 2016 budget shows no expenditures for new buildings. It is an established campus that was started in 1963. From a simple case study perspective, The Bonneville County Panel Report group refutes the claim that local property taxes will remain low in Bonneville County simply because Eastern Idaho Technical College has all the buildings in place needed to transform into a community college. The Bonneville County Panel Report group notes that CSI and NIC have had their buildings in place for many years and property taxes are significantly higher than proponents in Bonneville County claim that a college there would be concerning starting tax rates.
To be clear, the proponents of the new taxing district in Bonneville County have claimed that taxpayers will see a new tax bill of $15 per $100,000 in taxable value the first year of the college’s operation. This is based on a non-binding, projected budget assembled by a committee of various proponents who wrote a report referred to as their “panel report.” Their panel report estimated that the new community college might have an expected financial shortfall of approximately $851,000.00 in the first year of operation. However, they fail to account for additional first year expenses that could easily be added to the budget or unforeseen budget requests that are likely to be submitted. Even with the state of Idaho appropriating $5 million in taxpayer funded start up subsidies higher taxes maybe needed.
Their hopeful estimate, coupled with a county wide taxable property value of just over $6 Billion, Bonneville County would need to levy a new tax of $15 per $100,000 in taxable value to cover the yearly loss. However, their panel report is a non-binding estimate of basic institutional operations and neglects potential budget additions that could occur in the first year of the college’s operations.
The college’s first year budget will be determined by a five-member board that will be appointed by the Idaho State Department of Education. This board will be eventually replaced by elected board members in a staggered fashion as terms expire. The appointed board will choose first year spending priorities, and has sole authority to determine how large the first year budget deficit will be, and thus the tax rate.
The actual ballot question put before the voters on May 16, 2017 has no financial information or constraints on said first year spending. The only financially limiting language for the appointed board is found in state code 33 which limits the total levy rate to $125.00 per year per $100,000 in taxable value for just one of the eight funds that can be charged to the taxpayers the first year. That maximum levy rate will give the new board access to over $7,500,000 in property tax revenue, based on Bonneville County’s taxable property value of just over $ 6 Billion, for the Maintenance and Operation fund of the college. The newly appointed board could ask the county for that amount each year without further voter approval once the taxing district is established, and can ask for monies for projects or needs in the other seven funds.
Because the other panel report has an estimated budget that is nothing more than a projection, it is completely non-binding. In fact, there is little basis to support the claim that the first-year tax increase property owners will be charged will be $15 per $100,000 in taxable property. Their report is only a suggestion and their writers have no authority to affect or limit the college’s actual first year budget. A likely scenario would be that the newly appointed board, vested with budgeting and taxing authority, would likely fund additional start up projects ranging from salary increases, building remodels, possible parking lot expansions, and numerous other “wish list” items not found in the panel report.
As stated, the appointed board can spend up to $7,500,000 derived from property taxes without any voter approval for just one of the eight state approved taxing funds. This first-year budget request which the board will make to the property tax payers is a complete unknown until the actual budget is set. Likewise, the new tax rate also remains an unknown, though it cannot exceed the state cap of $125 per year per $100,000 in taxable value for the M&O category. Any tax quotes before the final budget is set is purely speculation and should be labeled by the proponents as such.
The Bonneville County Panel Report group fears this newly appointed board will ignore their panel report estimated budget projections and use other data and spending requests to formulate a budget requiring much higher property tax rates. A new tax rate of $25, $50, or even $100 per year per $100,000 in taxable property is possible. Because the other community colleges in Idaho that are in areas more like Bonneville County tax in the $98 to $112 per year range, it is highly likely that the college in Idaho Falls will start out at a tax rate in line with other state institutions, or perhaps with a rate that is the average of CSI and NIC, which would be $105 per year per $100K in taxable value.
The community college board will also have the authority to increase property tax rates each year by 3% without voter approval. If the board decides not to increase its request in any given year, they are entitled to recapture any uncollected revenue in any future year. This taxing mechanism is called “forgone revenue”. Forgone revenue can be significant. If the starting tax rate of the community college is $100 per $100,000 in taxable value, the amount property owners can be taxed grows to $134.39 per year after 10 years. In 20 years, the annual property tax grows to $180.61 per $100,000 in taxable value. Proponents called the 3 percent increase insignificant on a radio debate on KID radio on April 21, 2017. But this built in tax rate increase is very significant especially as the amount compounds in future years.
The board can also ask the community to pass levy increases anytime. These are typically for additional building projects, including remodeling of existing structures, new buildings, parking lots, or other wants. These requests are normally placed on the ballot and require a super majority approval. Other Idaho community colleges have made numerous tax rate requests, the latest being a $180,000,000 ballot measure from CWI in November of 2016. The ballot measure failed.
The May 16th 2017 election will require a super majority approval. A previous similar attempt at a community college in Bonneville County failed to achieve the required 66.66% in 1991.
NIC collects $ 15,210,260 in local property taxes in 2015 (see page 18)
NIC’s local property tax levy rate in 2015 was $112 per $100,000 in taxable property (see page 57) https://www.nic.edu/about/annualFinancialReport.pdf
NIC has a taxing district that has just over $13 billion in total taxable value. This produces the $15,210,260 the college is collecting with a levy rate of $112 per $100,000 in taxable value. Bonneville County has about $6 billion in total taxable value. To collect a similar $15,210,260 revenue, a local property tax rate in Bonneville County would have to be about $394.47 per year per $100,000.00 in taxable property.
The state taxing levy cap for community colleges is $125 per $100,000 in taxable value is found in Idaho Code 33-2111 and surrounding chapters
Information about CWI’s $180,000,000.00 failed bond in 2016 can be found here: http://www.ktvb.com/news/politics/elections/voters-reject-180m-college-of-western-idaho-bond/350293587
Who Sets the First-Year Tax Rates?
Proponents of the community college, such as their spokesman who was on the Neal Larson Radio show in April 2017, have continued to assure voters that the community college will be under the local control of an elected board. That is not true at the crucial beginning when the initial tax rates are set.
If the May 16th, 2017 ballot measure is passed the Idaho State Department of Education will appoint a five-member board. Prior to these appointments, the taxing district will be divided into five geographic zones. The Department of Education will then solicit applications and nominations from interested persons who wish to be appointed. The Department will then choose one board member from each zone.
Next, these newly appointed board members will meet and finalize their first annual budget. There are no rules or limits to what they can ask for from property taxpayers, except a maximum levy rate of $125 per $100K in local property value for their operations and maintenance fund. As mentioned there are seven other funds, some without taxation limits, for which they can also set budgets. Each of these fund budgets will also impact local property tax owners. (See section 4: Eight Types of Taxes).
In the first year, the starting tax rates for any of these eight funds need no taxpayer approval. Please keep in mind that who the first state appointees to the community college board are is completely unknown until after the election.
Taxpayers will be at the complete mercy of a yet-to-be appointed board who are not bound to any financial speculations of college proponents, or state law, except the limits in code 33 and other places which allows taxes to start at a level more than nine times greater than the proposed $13/$100,000 in valuation.
The Eight Types of Property Taxes and Limits
While many taxpayers may be familiar with a standard Maintenance and Operations fund (M&O), under various Idaho codes there are numerous types of taxes community colleges can levy on property owners. All 3 current community colleges in Idaho charge their property owners a tax for M&O and for insurance, while at least one also charges for grounds and gyms.
Below is the list of funds that have state imposed taxing limits, followed by a list of fund types that have no state imposed limits.
Community College Tax Types
Initially Set by An Appointed Board
For each $100,000 in Taxable Value
Maximum State Imposed Limits
Maintenance and Operations 125
Gym and Grounds 10
Upper Division Classes 20
Court Ordered Judgements 60
ITEMS WITH NO LIMITS
Tort Claims or Judgements
*Increase from previous year is capped but starting point is unlimited (See Idaho code 33-2107A and 2110A(3) for more details). For a list of the limits of these various taxes see page 8 on the pdf downloaded from https://www.whyacommunitycollege.com/8-different-new-taxes/
Community Comparisons with Twin Falls
Proponents of a Bonneville County community college claim such an institution would increase economic wealth in this area. Let’s look at that claim.
Bonneville County has a “higher average income” without a community college than Twin Falls County has with CSI. This is true both before and after Twin Falls County started their community college. CSI was established in 1963. This Panel Report group included and analyzed the income differences from census data comparing the two communities before CSI was established as shown below, along with data for the decades after.
Proponents claim the community college will have a $66 million economic impact, but that does not mean any new wealth is being created. Indeed, collecting taxes and spending them locally does not create wealth, but rather just shuffles dollars around from one taxpayer to another. If shuffling around tax dollars from one taxpayer to another taxpayer created true wealth, why not tax at a much larger amount? It is a basic economic principal that government can’t tax a community, state or nation into prosperity. Taking from Bill to pay Tom does not create new wealth.
For those claiming that a community college will bring a big boost to a local economy, the CSI model is a dismal disappointment. It just didn’t happen. Idaho Falls continued to have a higher income before and after CSI was established. The Bonneville County Panel Report Group finds it a stretch to claim Bonneville County will see significantly more benefits than those experience by Twin Falls County residents which appear to be negligible.
1960 (Before CSI)
Idaho Falls – $6,844
Twin Falls – $5,549
1970 (After CSI)
Idaho Falls – $10,113
Twin Falls – $8,491
Idaho Falls – $7,027
Twin Falls – $6,215
Even today, Idaho Falls seems to outshine Twin Falls in prosperity. Idaho Falls residents enjoy an average household income of about $44K while residents in Twin Falls lag behind with average income of about $41K.
Here are several of the charts used in obtaining the economic numbers above:
Future Tax Increases- the 128% increase in 7 years at NIC
Northern Idaho College (NIC) is an established institution founded in the 1930’s with their buildings paid for, an established reputation, and a population closer to Bonneville County than CWI. Therefore, it is interesting to study NIC’s taxes and budgets as a preview of what our tax situation may look like.
Below is link to the budget information from NIC in a file that is downloadable. On page 6 is an interesting chart showing that in 7 years the tax rate to local property owners went from $53 per $100K in taxable value to $121, an increase of 128%!
It takes $121 of property taxes each year per $100K in taxable value to make NIC break even. Keep in mind that amount is far greater than the touted $13 per year cited for Bonneville County.
The NIC tax increase history and chart is information that residents of Bonneville County should be aware of. NIC requires about $15 million each year in property taxes to break even. Voters should compare that to the roughly $851,000.00 one panel report suggests that it would take a community college in Bonneville County to break even. It appears the $851,000 estimate is a number that is widely inaccurate to what a community college will cost property tax payers because the data from CSI and NIC is so significantly higher, NIC’s taking in over 17 times greater than a non-binding estimate from the other panel report.
Be sure to download the report and reference the chart at the top of page 6.
EITC Can Train Students Right Now
When EITC was established, it was done so with the promise that it would offer specific, local, industry-needed training. It has and it continues to do so. One notable training program is the Radiation Safety program so many INL workers have completed.
EITC can continue to train and offer such programs. In fact, they advertise they do right now. Bonneville County taxpayers do not need the expensive of becoming a community college to continue workforce training for local businesses.
Below is a screenshot of EITC’s current we, which the details of the web address is found at http://www.whyacommunitycollege.com . It clearly says EITC is ready to help any local business that needs customized training. No Community College required.
Lack of Significant Community Economic Growth
For this section the re-iteration that wealth does not come from shuffling around taxes from the pocket of one taxpayer to the pocket of another. There is a huge difference between the creation of value and wealth and economic activity.
Additionally for the section The Bonneville County Panel Report group will include, below, the written opinion of one local Republican leader, as he submitted it to http://www.whyacommunitycollege.com
He writes: As proponents of the new college taxing district have faltered in their erroneous attempts to convince Bonneville County voters of the need for a Community college in the face of dropping enrollment state-wide in brick and mortar institutions and a growing realization of the plethora of less expensive options currently available, they have begun to focus their attention on promises of economic growth.
In the slick hypnotic cadence of the snake oil salesman, they promise jaw-dropping returns on the investment. Beyond the tried and true shell-game of the politician’s insistence that taxing Jim to pay Bob is a net gain, we are told that the college will be a veritable tsunami – a tide by which to raise all ships.
When I am told to invest, and promised a return that defies common sense, I tend to insist on some sort of verification, and what better way than to analyze the economy of our neighbors to the south. Twin Falls has been home to the College of Southern Idaho since 1964, and as such provides a demographically and economically viable case study from which to analyze the empty promises of economic boom waiting just behind the ballot box.
Having had over half a decade for the great economic promise of a community college to work its magic, according to DataUSA, the average annual income in Twin Falls comes in at $41, 927. So, it’s somewhat surprising to learn that the average income for the grossly deprived Idaho Falls resident comes in at $44,580.
I think I’ll stick with aspirin for what ails me, and send the snake oil salesman on down the road.
Ballot Box Issues and Deception
When a few people opposed to a Bonneville community college posted some concerns about the new taxing district on the http://www.whyacommunitycollege.com website, KIFI TV8 quickly posted some responses on their Facebook page that came from current EITC President Richard Aman.
When The Bonneville County Panel Report group questioned why Bonneville County needed to create a taxing district and raise taxes, his response, as published, was: State Statute requires a “taxing district” be established to create a community college.
According to the ballot provided by Bonneville County Elections, the ballot question reads: “Shall a community college district be organized to create the College of Eastern Idaho which shall be a successor entity to Eastern Idaho Technical College.”
This ballot question, some have been told, was written by the group who obtained the required signatures to put the issue on the ballot. Is it possible that in the gathering of the signatures as well as the writing of the ballot question, there was an effort to disguise the fact that new taxes were required to pass this ballot item?
Opponents believe there was a high likelihood this was an intentional “omission” to keep voters from understanding the impact of a “yes” vote on their property taxes.
In fact, the Bonneville County Panel Report group has recently have been told that great care was taken to draft specific language for the ballot issue, and that multiple visits were made to the election office to get wording that would hopefully meet the bare minimum of legal language while specifically omitting the words “taxing district.”
It seems clear they omitted key and important information in the ballot wording. Our panel feels this is wrong and deceptive. What else has been hidden from the voters?
A Community College Could Hurt Local Families
Proponents of creating a new taxing district that will turn EITC into a community college have projected the enrollment will jump from about 700 students to about 4000 students over the next six years. They anticipate many students will come from surrounding areas.
At the same time proponents are touting that 900 new jobs will be created with this change. On page 4 of the Rexburg Panel Report they write, “The community college would likely employ 362, including staff and faculty. It can reasonably be assumed the community college would create the remaining 561 jobs as a result of student spending, employee spending, and supply chain activity.”
Experience tells us that most students at community colleges also need jobs while attending school. So, it appears there will be 3300 new students at the college fighting for 561 new jobs in the community, which will mean 2800 new people will be competing with our current residents for the limited jobs already. Our high school students, looking for entry level jobs, will probably be the most affected, competing in the local marketplace against older community college students seeking the same part-time or “flexible hours” types of employment.
In a few years, it could be nearly impossible for high school students to find weekend, after school, or summer work in our area with so many new community college students competing with them. The college does not bring enough jobs to the area to fill the employment needs of its students and could create the most over-staffed local job market Bonneville County has ever seen. This is not good for local families or our youth.
A Look At Dual Credits
High School students in Idaho are encouraged to take “Dual Credit” courses and the State of Idaho has set aside about $4000 per student to pay for these courses. Students do not need to be near a community college to participate. In fact, students in Pocatello take a high number of courses and they do not have a community college nearby.
Students in Bonneville County currently take these dual credit or “Dual Enrollment” courses through various institutions including EITC. Students at Teton High School in Driggs participate as well, yet they are 4 hours away from CSI. One report shows that the students who do take Dual Enrollment courses at Teton High School average 60 completed credit hours each.
This is a screen shot from a report from Teton High School, the full information and source is listed at http://www.whyacommunitycollege.com In short, no Community College is needed here for our Dual Credit programs.
Also, below is a screen shot showing EITC is already offering Dual Credits, the full address is at http://www.whyacommunitycollege.com
The Bonneville County Panel Report finds the conclusion to oppose the May 16th ballot initiative extremely easy to make. Community colleges have shrinking enrollment and the future true costs to taxpayers are simply unknown because they will be set by an appointed board. The best indicators, existing community colleges such as CSI and NIC, show that the average tax for Idaho property taxpayers could be as much as $112 each year per $100K in value. Indeed, with eight separate taxing funds, some with no statutory limits, the taxpayer is at huge risk the first year the college is opened because an appointed board can initiate the tax rates at any level below statutory rates.
Further, at least one Idaho community seemed to experience no economic benefit from the establishment of their community college in Twin Falls County in comparison to Bonneville County, both before and after CSI was created. EITC can continue to offer workforce programs and local students can in fact continue to take dual enrollment classes without the proposed conversion. Residents seeking local community college opportunities already have CSI-Idaho Falls. The low enrollment in CSI Idaho Falls classes shows a lack of local interest in such venues.
As noted, community college enrollments continue to drop nationwide, and while CWI is a rare outlier, Bonneville County’s population is more like CSI and NIC’s area and the taxes and results should be similar to those schools.
Voters should be particularly concerned with apparently deceptive ballot wording and continued promises of a $13 tax hike for the average voter, an estimated figure based on “hope for” budgeting, and in no way binding on the yet-to-be-appointed board.
This panel report shows conclusively that a Bonneville County community college is not needed, duplicates existing educational opportunities, and poses the likelihood of greatly increased property taxes for residents and business owners, with little to no true economic growth.
In short, establishment of a community college is clearly NOT in the best interest of the taxpayers of Bonneville County.
A NO Vote May 16th is recommended.