A few strings a-taxed

Orange County School Board officials feel their backs to the wall. Some 136 of their schools desperately need renovation. At least 25 new schools will be required to keep up with growth. Altogether, the board is facing $3.3 billion in building costs over the next decade -- and administrators simply don't have the money to pay for them. Classrooms are overcrowded and many don't have Internet access. Others have faulty electrical wiring and air conditioners. And then there's the district's many portables, disdained by parents and politicians alike.

So, on Sept. 10, the board will ask voters to approve a 13-year, half-cent sales-tax increase to head off the impending budget crunch. As clear as the need is, it shouldn't be a hard sell: Last year, voters in the surrounding Seminole, Lake and Volusia counties all approved or renewed full-cent sales taxes dedicated to schools and road-building funds. Orange only wants half that. Moreover, 48 percent of Orange's sales taxes come from noncounty residents, so the burden doesn't rest too heavily on the pocketbooks of those who live in the county.

Early polls show the tax's approval rate between 54 percent and 62 percent, and no elected officials in the notoriously tax-shy Orange County, which has voted down several sales-tax referendums in the last two decades, deny the need. The tax should be a slam-dunk.

But school officials are still afraid they'll lose. The last sales-tax defeat, in 1997, was as much a vote of "no confidence" in the school board as a rejection of new taxation. So, instead of offering voters a straightforward deal -- "We need the money; give us this money and we'll fix the problems" -- administrators chose to couple the sales tax on the ballot initiative with a seemingly counterintuitive property-tax rollback for landowners.

That decision -- which came after months of rollback-lobbying from the Orlando Sentinel and a strongly worded letter from Orange County Chairman Rich Crotty -- speaks as much to Orlando's small-town politics as to the school board's lack of confidence in its ability to sell the sales tax. Essentially, the daily newspaper and Crotty dictated to school officials what the upcoming referendum would ask for, despite the fact that polls showed voters didn't believe a rollback would affect their vote on the sales tax one way or another.

The rollback isn't aimed at average suburbanites. Rather, it's a carrot being dangled over the powerful homeowners' associations and anti-tax groups that killed the penny sales-tax referendum five years ago. For most homeowners, the property-tax savings would be negligible: A $125,000 home means a $50 savings per year. Factor in the increased sales tax, and the middle-class would about break even.

Disney, however, would save at least $2.5 million a year, or $32 million over the life of the sales tax. Universal and Marriott would get a rollback of $730,000 and $400,000 a year, respectively. In the unlikely event that the county's property values remained stagnant until the tax ends on Dec. 31, 2015, the property-tax rollback would cost the school board $264 million. It will probably cost much more.

While the school board promises the rollback won't affect any renovation projects, it definitely won't help the county's working poor, most of whom rent their housing. In fact, both taxes are regressive, meaning they hit the poor hardest, while the rich profit.

Though many school officials aren't happy about the property-tax rollback or the way it was forced upon them, they say an imperfect tax is better than nothing. One way or another, the renovations need to be done. Without the sales tax, there could well be year-round schools and much larger class sizes. As school board Chairman Susan Arkin puts it, "There is no Plan B."

The property-tax rollback may be a double-edged sword, in that liberals -- who typically support taxes for schools -- may be bothered by breaks for big corporations and landowners. Since the referendum to increase the sales tax and reduce the property tax shares a ballot with the Democratic gubernatorial primary, liberal voters are likely to turn out in droves.

"[School officials] got snookered by the right," says Orange Democratic leader Doug Head. "The conservatives in this town, led by Crotty and amateur right-wing Repub-licans, took a look and decided the only way to push through this was to [establish an] incentive for conservatives to vote for [it]. Nobody understands the nuances [or] the implications of the rollback. The Democratic Party is not ready to endorse this until we understand the numbers. We don't want to be inadvertently endorsing something that is bad for kids."

When the right attacks (its fringe dislikes public education in general), the rollbacks will be prime ammunition. "It can be a tremendous talking point if Ax the Tax decides to weigh in," says conservative radio host and Ax the Tax founder Doug Guetzloe. He credits his organization for killing the last sales-tax referendum, though he hasn't yet decided whether or not to oppose this one. But Guetzloe does call the property-tax break "a cheap carnie trick. Ã? The average taxpayer doesn't get any relief, but Disney, Universal and Anheuser-Busch, they sure get a big payoff. [School officials are] doing a bait-and-switch."

"I think [school officials] sabotaged themselves," Orange Commissioner Homer Hartage says. "Most people see it as a gimmick and a scheme. Do you need the money or don't you need the money?"

That's not a fair question, Arkin says. The amount of money the sales tax generates won't change. Instead, the sales tax will last an additional two years -- from 11, as was originally planned, to 13 -- to make up for the loss of property taxes. And because the property-tax rollback comes from the board's "capital fund," which is exclusively dedicated to infrastructure needs, that money couldn't legally go to increased teacher's salaries.

But the rollback may slow some construction projects. And if the school board asks voters to renew the sales tax 13 years from now, as other local counties have done when their voter-imposed sales taxes expired, it will continue to be two years behind in getting additional funds.

If the sales tax passes, developers will likely use it to lobby the county to do away with the two-year-old rule blocking developments near overcrowded schools. If they're successful, school officials worry privately, the new sales tax will be for naught. All of the progress they make in the next 13 years will be lost to new growth.

In their year of sales-tax lobbying, school board members found voters apathetic toward the rollback idea. Twice -- in November and again in January -- schools officials approved the sales-tax referendum without the property-tax cut, both because they thought it was unnecessary and because they feared that state law prohibited them from cutting property taxes for more than one year at a time.

"[The rollback] didn't seem to be an issue as we talked to the public," school board member Rick Roach says. "Nobody came out strong for or against it."

That's not completely true. The Sentinel wanted the rollback, and it made its will clear. When school officials didn't fall in line, the editorial page mocked them as "weak leaders" and uncaring toward their constituents.

Orange County Chairman Rich Crotty picked up the newspaper's campaign, declaring that the rollback was the only way voters would approve the sales tax.

"I am dismayed that the School Board has abandoned property-tax relief in favor of a bigger tax scheme," Crotty, a former property appraiser, wrote in a letter to Arkin Jan. 29. "Anything short of [the tax swap] is an exercise in folly Ã? I strongly encourage you to rethink this decision."

The next three months saw a contentious impasse, with Crotty and school officials even holding separate press conferences on the same day to push for and against the property-tax cut. In April, when the state legislature convened to address the state's education bill, Crotty successfully campaigned for a change in the statutes to give the school board the option of a long-term property-tax reduction. In doing so, however, he short-circuited the voters' will: On the same ballot as the sales-tax referendum, school officials proposed asking voters if they wanted the school board to seek the law change. Crotty removed that option.

In May, the school board approved a sales-tax referendum that included the rollback, though some officials still worry that voters won't want it if it means an extra two years of increased sales taxes.

The biggest hurdle school officials must face is convincing voters they can be trusted to spend the $2.7 billion wisely. History isn't on their side.

The seven-member school board is in charge of 156,000 students and 144 elementary, middle and high schools. It has an operating budget of $953 million and 20,000 employees, making it the largest government in Central Florida and one of the largest school districts in the nation. Yet it is perceived as weak and incompetent, a perception even school officials acknowledge.

Orange's school system is seen as top-heavy and mismanaged, with leaders throwing millions of dollars at exorbitant projects like its bronze-hued, nine-story administration building (derivatively called the "Taj Mahal") and Dr. Phillips High School, which was designed like a community-college campus. While the school district threw millions of dollars at new schools, older ones sat in disrepair. Tales of shoddy workmanship and long-overdue maintenance abound. Though school-board members are part-time, they command larger paychecks than some teachers. They also are seen as being overly reliant on upper-level staffers such as Superintendent Ron Blocker and school board attorney Frank Kruppen-bacher, and on outside consultants.

Most important, they've amassed a multibillion dollar construction shortfall. Sure, growth is a problem. But Orange isn't Central Florida's only fast-growing county, and adjacent school boards aren't in the same fix. Put simply, critics say the school board doesn't plan for growth well.

The disrespect predates present school-board members -- and since the last failed tax referendum, the school board has desperately tried to revamp its image. In 1997, the board established the Construction Oversight and Value Engineering (COVE) committee to analyze building projects for cost-effectiveness. If the sales tax passes, COVE will audit the 136 renovation projects to keep them within or below budget. Yet, to critics, COVE's integrity is suspect.

Its members are picked by the school board, not independent groups such as the regional Chamber of Commerce, the county commission or Orange's comptroller. Critics argue that the school board's control over COVE members limits the committee's oversight abilities.

In February, the school board put its $28.5 million downtown building for sale. Last year, Blocker established the 13-member Accountability and Responsi- bility Advisory Committee, co-chaired by Guetzloe and former state lawmaker Dick Batchelor, to make recommendations for the board to establish a better rapport with its constituents. But the committee's meetings were poorly attended, and Guetzloe doesn't think the board has taken his recommendations seriously.

Then there's the ongoing fuss over millionaire developer Charles Clayton, who pledged $250,000 for the pro-tax campaign, but has since rescinded his support amid allegations of corruption. He said the board offered him a prime shot at development projects if he supported the tax. The school board denies the allegations.

The renovations will be costly: Meadowbrook Middle School, which has 1,250 students, is the district's top priority and will cost $14 million to fix. It's not nearly the most expensive project on the list. A new high school in West Orange will run more than $85 million; fixing up Edgewater High School will cost more then $42 million, and renovating Dr. Phillip's ninth-grade building is slated for $25 million, just to name a few.

"That shocks the living daylights out of me," says Lew Oliver, a developer who heads the Orange County Republican Party. At first blush, he thinks the projected costs are far too high. Orlando's lavish City Hall, he points out, cost only $31 million, yet the school board is planning on spending more than twice as much on a new school. Those school costs will mean the school board is spending almost $11,000 extra per student.

Though the property-tax cut was designed to appease anti-tax groups, the county commission didn't seem too thrilled with it. On May 14, commissioners had the simple task of passing the school board's referendum to the supervisor of elections, who in turn would place it on the ballot. Their vote was a formality: By state law, they could neither alter nor reject the referendum. Normally, such an event would be full of pomp and circumstance, with commissioners and school officials congratulating one another while smiling for TV cameras. Not this time. There was a 45-minute debate led by Hartage and Commissioner Bob Sindler, who introduced a (probably illegal) motion to take out the rollback language. Sindler argued that cutting one tax while asking voters to approve another not only doesn't make sense, but it also doesn't make for sound policy. The resentment wasn't just directed at the rollback. Commissioners also objected to the way Crotty used the county's bully pulpit without consulting them. But there was nothing the commission could legally do.

So, in September, it will be up to the voters to decide whether to approve a tax that benefits rich landowners or to allow kids to suffer in overcrowded portables.


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