Tuesday, September 14, 2010

Issue 4 – Levy for the Columbus Metropolitan Library

Item F2 on last night's Board of Education agenda was a resolution "that the Board of Education support Issue 4 for the Columbus Metropolitan Library." I voted NO on this resolution, which passed by a 3-1 vote (Board member Dave Lundregan was out of town on business). During the time for discussion on this item, I read the following statement into the record:

While I am both a user and fan of the Columbus Metropolitan Library System, I cannot support the levy they are bringing to the voters this November as Issue 4, which would triple the amount of property taxes collected from Franklin County property owners. My reasons are as follows:
  1. The forecast provided by Mr. Losinski indicates that the intention is to grow the spending for Salaries and Benefits at a rate of 4.7% per year - for the next 10 years. Of the $90m of new spending planned over the next 10 years if this levy passes, $85m or 95% will be applied to salaries and benefits.

    While I believe that it is appropriate to raise enough money via additional property taxes so that the employees of the library system could be awarded increases in salaries and benefits over the next 2-3 years that are in alignment with the general condition of the economy in our region, a CAGR of 4.7% for ten years for salaries and benefits is not in alignment with our current general economic conditions.
  2. Mr. Losinki's forecast also shows their reserve balance rising from $5 million in 2011 to a peak of $37 million in 2016. I understand how levy funding works, building a surplus in the early years which is drawn down in later years as spending continues to increase.

    But in this case, the library system management is asking the taxpayers to trust the library system to hold tens of millions of dollars of taxpayer money, and consume it at the pace and for the purposes they are committing to right now. As honorable as I believe the library system's leadership to be, things change, and future leaders could easily decide to spend the money differently, or more quickly, and would not need voter approval to do so. It will very hard to not spend that $30 million reserve when it's just sitting there, which would leave future years underfunded and generating the cry for still more tax money.

    As challenging as levy campaigns may be, I believe that it is better to ask the taxpayers to fund a maximum of the next 3-4 years, and then see what things look like when we get there. I feel this is especially the case when the public entity is asking for a permanent levy, as is the case here, rather than one which will automatically come up for renewal at some point in the future.
So I reiterate that I am a fan and supporter of the Columbus Metropolitan Library System, and would support a levy that funds a lower rate of growth for personnel costs, and fewer years of operation. The future is too uncertain to make this kind of commitment right now, in my opinion.

So if the Library is asking simply to replace a 2.2 mill levy we're already paying, why do I say that this vote would result in a tripling of the amount of property taxes we pay to the Library?

It has to do with a state law – ORC 319.301 – commonly referred to by the education community as "HB920," which says that once a levy is passed, the amount of tax it collects on pieces of property that existed at the point in time when the levy was passed will never go up. It is enacted by adjusting the "effective millage" of a levy downward when the County Auditor increases the assessed value of a piece of property (owners of property constructed after the levy passes also pay this effective rate).

That has happened with this levy. When it was originally passed in 1986, it collected $67.37 for each $100,000 of property value. In 2010, that same levy is collecting $22.97 for each $100,000 of property value.

But that doesn't mean the amount of money being collected has gone down!

If you had a home valued by the County Auditor at $100,000 in 1986, you paid $67.37 in property taxes to the Library due to this levy. And in 2010, you will still be paying $67.37/yr to the Library. However, your property will have increased in value (in the eyes of the County Auditor) to $295,000. Without the protection of ORC 319.301 (HB920), the amount you would be paying to the Library annually would have increased to nearly $200/yr without you having any say in the matter.

When an expiring levy is replaced, as is the case with Issue 4, the prior adjustments are wiped out, and the millage rate is restored to full value. Therefore passage of this levy will increase your property taxes from $22.97/yr per $100,000 of current value to $67.37/yr per $100,000 of current value.

The library is also asking for an additional 0.6 mills, bring the total new tax rate to $85.75/yr per $100,000 of current value. So I was understating the situation by saying it would triple the amount of money going to the Library system. It's actually 3.7 times the current rate.

The Library system also wants to end the practice of asking for levies which have to be renewed every so often. This request is for a "permanent levy," which means that, if it passes, it will collect $85.75/yr per $100,000 of 2010 property values forever.

Here is the source data I used to make my analysis. It was provided by Patrick Losinski, the Executive Director of the Columbus Metropolitan Library.

Any questions or comments about my vote?


  1. Paul, I think you are bang on the money. I also think that residents should be visiting their local library branch and asking the staff there how they think this can possibly be justified in the current economic climate. I also support the library, but this levy is an insult to our intelligence.

  2. Paul, I support the library and again the need to raise wages is fine. But to promote 4.7% is another non reality moment for those who spend money that is not theres. A 2.5% to 3% would be in order, depending on the last raise which probably was not much. This would still provide an increase.

    Put this on top of our next school levy to pay for the next set of raises in the 5% and above range and I wonder how we really afford all of this when people are layed off, getting pay cuts and wondering if their position elimination will be next.

  3. Let me clarify something: The Library folks won't be getting 4.7% annual raises for 10 years if this passes. However, the plan is to give 2.9% (why not just say 3%) raises, with an 8% annual bump for benefits costs - mostly health insurance. They would also restore some of the Sunday hours that have been eliminated.

  4. Thanks for this post Paul. I was ignorant of all this and was planning on voting for the library issue but will now vote against it.

  5. I think that you're missing a few key points in the numbers above. First of all, Paul is correct about salaries and benefits increase amounts to, and frankly it seems to me that predicting an 8% annual increase in benefits cost is highly conservative given that the cost of health care has been going up by 10%-15% annually in recent years. Second, the amount of funds held back in reserve is likely for capital improvements. If the library only has 5 million in reserve right now and it remains there, there's no possibility for anything other than basic repairs to existing buildings and certainly no new building especially in the Hilliard area where it's badly needed. Finally, it sounds awful to say that the taxes are going to triple, but when you look at the actual cost and see that it amounts to an extra $5 per month per $100K property value it looks like a much better deal. So if you own a $300K house in Hilliard you have to pay an extra $15 per month for the best library system in the country? And the alternative if it fails is half the existing system or worse if the state continues to cut funding? Seems like a no-brainer to me...

  6. Jake: Thanks for commenting.

    There is no indication in the forecast Mr. Losinski provided that would suggest that any of the $30m reserve would be used for capital improvements. Rather, starting in 2018, that reserve would start being drawn back down mostly in order to pay for every-increasing salaries and benefits, which will have grown from $36m/yr in 2011 to $54m/yr in 2020.

    All I'm advocating is that they should ask for less by moderating the planned growth of salaries and benefits and by asking for only enough money to fund 4-5 years. Then we can take another look at where our economy is.

    Defeating this levy is not the end of the world - they can put another levy on the ballot in May. But it would send a message to the library leadership that they need to adjust some of their plans and assumptions and present something more affordable to the public.

  7. Thanks for the information you provided here. I admit that I was going to vote for Issue 4, but now I probably won’t. I didn’t realize this was going to be permanent.

    My first thought happens to be how we became the best library system in the country with less money and fewer hours. Are employees just working harder in the jobs that remain? I don’t think this is a bad thing; we all have to work harder and cover more bases in this economy. We have all learned to live without the Sunday hours, and I’m not sure it’s necessary to add them again.

    Secondly, I’m concerned with some of the numbers they provide in the referred .pdf document. If their brick and mortar, website, and homework help center visit numbers were unique visitors I’d be more impressed. As it is, each card holder would only have to visit any library branch just over 16 times in a year; that’s not much. (How exactly are user visits calculated or tracked anyhow?) Website visits of 10.1 million is similarly skewed considering every computer inside each branch probably defaults to the library website; if even a fraction of them did, it’s still skewed. If not, that’s only 21 visits per year per cardholder.

    This building is the third Hilliard library I've lived through; it's discouraging to know it probably won't be my last. Is this just poor planning? Do the City and the school district population projections ever play a part in this?

    My last thought is, I haven’t had a pay increase since 2007. I would love, love, LOVE to be guaranteed any raise for each of the next ten years, let alone permanently. In reality, I think we know the library worker bees would not get much in raises and the administrators will (if you look at it from the basis of any percentage of wages).