Pennywise: With ELOST up for a vote again, the Citizen counts the cost of the county’s 1% sales tax
By Colby Dunn • Staff Writer
Photo illustrations by staff
27.9 million -
how many gallons of gas- at the current $2.47 a gallon - it would take to generate enough sales tax to pay for the elementary school gym and sidewalks created by ELOST III. It would take 5,259,700 bottles of Pantene Pro-V shampoo to foot the bill for just the architect's fees that ELOST III funded. A little over 701,000 overnight stays at Madison's Wingate Inn would raise enough sales tax to fund the $5.2 million gym that Morgan County High School got out of ELOST III. And all of this is less than half of what ELOST III - the1% local option sales tax for education - has paid for since it started in November 2005.
The next incarnation of the tax, which comes before voters for renewal this Tuesday, Nov. 3, will seek $29.5 million from Morgan County consumers for a number of projects, including a new elementary school for Rutledge that was on the list with the last ELOST but didn't make it to fruition.
For the school system, renewal of the tax would mean improved classroom technology, a gymnasium pavilion at Morgan County Primary School and, again, the proposal for a new elementary school. But what would it mean for consumers?
Estimating the economic impact of ELOST means looking at not only what it costs, but what costs it would create if it were voted down.
The U.S. Department of Labor estimated that in 2008, the average family of four spent $709 per month on groceries, including household items. Without ELOST, that family would save $84 per year on groceries. Buying a new Ford F-150 would cost $324.80 less. $26 a year would be shaved off a weekly dinner at a restaurant and a full set of mid-range tires would come at a $5 discount.
One penny on every dollar may seem like very little, but it does, eventually add up. The school system estimates that they pull in an average of $305,314 per month from ELOST, although some months are better than others. That's about $200 per year for every Morgan County resident.
However, the point that ELOST proponents are quick to make is that less than half of that is likely to actually come from Morgan County residents. The school system estimates that at least 50 percent of the funding comes from non-residents, although superintendent Stan DeJarnett notes that this stems from anecdotal evidence and surveys done of some Madison stores that keep records of their customers' origins.
He says that he believes that number is likely much higher, especially due to the high proportion of truck stops, hotels and restaurants and the junction of 441 and I-20 that attract especially high numbers of non-residents and their wallets.
"But even if it was just 50 percent," said DeJarnett, “that would still be a good deal for the residents of the county," - especially in light of the other funding options available.
Without the sales tax, the school system would rely on ad valorem property taxes alone to sustain themselves. They estimate that, without the tax, property taxes would be cranked up by 2-3.5 mils, a calculation based on their stated monthly ELOST intake over the 60 months of the tax's life.
That means that, for a Madison resident with a home valued at $100,000 in 2009, their property tax would increase by up to $133, from $936 to $1,069 - a 14 percent increase. ELOST supporters highlight that none of that tax burden could be transferred onto visitors, while a sales tax would push at least some of the load onto outsiders.
Opponents of the plan point to the proposals - and how they've changed over time - to highlight how ELOST could be bad for the county, and a glance at the proposed list of projects that came out with the last tax resolution will show that some, like the high school gym, came in far outside the original budget and some, like a new elementary school that was slated as a top priority in 2005, were scratched from the list altogether.
DeJarnett says the process for picking projects is down to the school board and what they think is appropriate.
"We're not trying to be evasive or non-transparent about what we're going to do," he said. "Our proposal list [for ELOST IV] is more specific than it's ever been."
But he also notes that such proposal lists are "kind-of a crystal ball" and the needs of the county can change in unexpected ways over a five-year period.
"The reason the elementary school didn't get built is because, one, we didn't have the money and two, we didn't have the enrollment," said DeJarnett.
When examining the two most likely options for school funding - ELOST or increased property tax - the comparison is, of course, not apples-to-apples, so to speak. A sales tax directly affects everyone, while only property owners are the paying out of pocket on property taxes; a property tax increase is a concrete, easily-measured figure, while sales tax is more difficult to quantify or determine the affect on residents.
ELOST fans rally around the many building, technology and improvement projects the three tax renewals have produced since the state allowed the idea in 1996 to prove its usefulness. The tax's adversaries decry the lack of oversight and broad leeway the school board is given with the money.
This Tuesday, voters must count the cost of ELOST IV and decide which camp they want to join.