FRONT ROYAL — Members of the Warren County School Board and Board of Supervisors’ Joint Budget Committee recently discussed projections for raising money for a possible new elementary school in a few years.
Potential revenue streams include adding a levy to the county's property tax rate or the sales tax rate.
“It’s my intention not to put any burden on the local taxpayers,” said North River District Supervisor Delores Oates at a recent committee meeting.
“I get calls every week from people who are in need who can’t afford to do the things that they could afford to do a year ago,” she told the rest of the committee. “It’s our intention that we cannot burden our taxpayers until we figure out what this economy is going to do. And if we build our tourism base, and they come and they stay and they spend and they leave, then we don’t have to burden our taxpayers.”
The committee did not discuss the specifics of a new school, which might not be completed until the year 2033, but County Administrator Edwin “Ed” Daley said on Tuesday that the new elementary school will cost an estimated $30 million to $35 million based on two proposals that the town received from national developers.
The new school building project is listed among the School Board’s future capital improvement projects on its Fiscal Year 2023 budget.
At their meeting, the committee heard from Daley about their options for raising funds, which he said could include a half-cent levy or a 1-cent levy on property taxes depending on how quickly they want to raise the money and whether they choose to levy the funds on property taxes or raise the sales tax.
“If you put it on sales tax, then everybody who’s shopping here contributes a penny at a time,” Daley said.
The discussion came in response to the committee considering school capacity numbers and noting that the county school division’s five elementary schools are near capacity.
Daley suggested that if the Front Royal Town Council approves proposals from national developers, the budget committee may need to begin the process of constructing a new school before the existing schools become too overcrowded.
The county would need to borrow the funds for the new school, he explained, and the debt service on the borrowed money is estimated at $3 million to $3.5 million, depending upon interest rates.
A 1% sales tax would generate about $6 million for the county, although if food sales are exempt, this estimate would be reduced to about $4.5 million.
A .5% sales tax would generate about $3 million for the county, reduced to about $2.25 million if food sales are excluded.
A 1 cent increase in the real estate tax will generate about $450,000 at today’s value, he said, or about $600,000 when the new real estate valuation takes effect later this year.
If the School Board and Board of Supervisors decide to build a new elementary school, they could propose to increase the real estate tax rate about 5 or 6 cents, under the new valuation or propose a referendum for a 1% or .5% sales tax dedicated to the elementary school debt.
Daley noted that the .5% sales tax levy would probably also require a 1-cent increase in the real estate levy to meet the debt service.
Although discussions are starting now, he told the committee it’ll take the county up to a year to approve a levy since they’ll need to assign a separate committee to prepare, promote and pitch a tax levy and move it through the referendum process.
Once the desired amount has been raised for the project, he said, the referendum and the levy will cease.
In the meantime, the county has been waiting to receive the audit of its fiscal year 2021-22 budget, which Fork District Supervisor Vicky Cook said should be coming “any day now.”
“Normally we’re in the budget planning process by now and without the audit, we can’t really make any progress,” Cook said.
Good news, she said, is they have a model prepared for when the audit is completed.
“Once we get it, we can pop in the numbers,” she said.
The School Board will hold a work session at 5:30 p.m. today followed by a 7 p.m. Budget Committee meeting at Diversified Minds, 465 W. 15th St., Front Royal.