.

Letter to the Editor: Senior Citizens Will Bear Heavy Burden of Bond Costs

Senior Citizen Claus Jensen writes in a letter to the editor about the impacts the proposed $196 million school bond could have on senior residents, especially those living on a fixed income.

(Ed. Note: This is the second of three letters Mercer Island Patch received over the weekend, March 16-18. from Janet Frohnmayer at 2 p.m. we'll publish a third letter from Cindi Pacecca, a first-grade teacher at Lakeridge Elementary School, at 6 p.m.)

Editor:

As a resident of Mercer Island for the past 32 years - and a retired senior at age 79 - I am extremely concerned about the financial impact of the upcoming $200 Million school bond, scheduled for a vote next month.

Most Senior Citizens are living on a steadily decreasing income, due to the near-zero percent interest policy of the Federal Reserve which has cut annual yields on IRAs and CDs from 5% to minus 2% when inflation is factored in.

Against that background, any major increases in local taxes are bound to jeopardize the financial well being of our fellow Senior Citizens and indeed force many of us to consider whether we can continue to afford to live on Mercer Island.

The projected cost to a homeowner with an assessed valuation of $950,000 will be approximately $3,600 per year for just the school portion of the annual Property Tax. The bond also calls for buying land for a "sixth school," but not the money to build that school, and for designing a master plan for the north campus "mega-block," but not the money for any changes there. Clarity on costs to citizens is critical in our current economic climate. We do not know the cost of other proposals that may come from the City, including a new fire station or moving city hall, or from King County, Sound Transit or others. (ref. Citizens for Rational School Planning at http://www.no-mi-school-tear-down.com/)

I am afraid that many Senior Citizens living on Mercer Island are unaware of the financial sacrifice that they might be forced to make due to the exorbitant cost of the bond. I hope they will join me in voting "NO" on April 17.

Sincerely,

Claus V. Jensen

Candace Scarcello Dempsey March 21, 2012 at 05:08 PM
Thank you, Mr. Jensen, for writing this letter. I just found this information on the Patch site, about seniors in need on Mercer Island. The Senior Foundation of MI is looking for ways to increase services to the elderly here on the Island thanks to an increasing level of demand. According to the 2010 United States Census, Mercer Island's median age rose to 46 years old — up from 44.3 in 2000. http://patch.com/A-rGZC Senior Foundation of MI Seeks Partner to Boost Services mercerisland.patch.com Advocates of local seniors are offering seed money to other non-profit programs to bring more services to Islanders age 55 and older. Obviously, our seniors are already in need. Yet another reason to vote NO. http://mercerisland.patch.com/articles/senior-foundation-of-mi-seeks-partner-to-boost-services
Kris Kelsay March 21, 2012 at 05:29 PM
Mr. Jensen’s letter brings up a legitimate concern for our Island seniors. “Will I be able to afford this on my fixed income?” The bad news for seniors, like Mr. Jensen, is that he lives in a community that must invest in new schools. The good news is that this bond approach has the lowest and most predictable impact on our seniors, than any other approach. There are programs for low income seniors and I have compiled some important facts on this topic here: www.whatifitfails.wordpress.com
Carol Lewis Gullstad March 21, 2012 at 06:20 PM
To clarify, a NO vote on the bond will still leave the school portion cost of property taxes at $2700 for a $1 million dollar home, that does not go away. Based on Mr. Jensen's statement, "The projected cost to a homeowner with an assessed valuation of $950,000 will be approximately $3,600 per year for just the school portion of the annual Property Tax," might lead some to believe that a NO vote equates to zero taxes and that is not the case, all other school taxes remain in place. Here is a link to how the whole pie looks for local and school taxes. http://mischoolsyes.org/cost/ School bonds and levies are about a third of the property tax pie regardless.
Kendall Watson March 21, 2012 at 06:41 PM
Thanks for clarifying that, Carol. We've written about this several times in the past, most recently at the end of February when the MISD revised their bond forecast: http://patch.com/A-rmFh. I've also made this same clarification in the comments elsewhere. It might also be wise to clarify that "a NO vote equates to zero taxes and that is not the case, all other school taxes remain in place" is only true if you assume that voters will renew the various levies for operations, technology and transportation. These must be renewed as well in due course (a few years from now), but only require a 50 percent vote, unlike the construction bonds.
Jackie Brown March 22, 2012 at 05:48 PM
Carol, thanks for clarifying the cost of the bond and how this is separate from other school taxes. It is also correct that those other school taxes are subject to periodic renewal by local voters. However, all of these local school taxes (including this bond) are essential for the long term well being of our schools and community. Washington state has utterly failed to fund basic education, with the result being local communities having to step up to avoid complete disaster. Among other things, our current levies fund over 80 teachers and other staff. Without local support, class sizes would soar, the high school could no longer offer seven periods, and those teachers left in our district would have virtually no resources to provide our children the education they need to succeed in a 21st century globalized, digital world. It is also worth noting that the state, which at one time provided funding as high as 60% of school construction costs, has steadily reduced its contribution to the point that local communities now must fund almost all of their schools’ capital spending. While we could reduce our local school tax to zero, the day Mercer Islanders fail a general levy will be the day I place my home on the market and move to a community that truly values its schools. Of course, there won’t be anyone willing to buy it. Mercer Island schools are OUR responsibility. Show your support by voting YES for the bond.
Kendall Watson March 22, 2012 at 06:27 PM
Well put, Jackie. This has got me thinking that we should examine what Mercer Island's legislators have actually done since the McCleary decision that unequivocally stated that the State Legislature had failed in its constitutional duty to adequately find school. What do you think?
Jackie Brown March 22, 2012 at 07:39 PM
I am frustrated by the continuing misunderstanding some have about the cost of the bond, which in part results from the No campaign’s confusing and misleading discussion of this cost. Their website actually states “Total School Bond Cost to You $3.79” (referring to the tax rate per thousand). That is absolutely false, as Carol points out. If this bond passes, the forecasted impact on next year’s tax bill is $0.70 per thousand. If you own a $1 million home, that is $700. This amount is deductible from your federal income tax, so the ultimate impact is up to 33% less. After next year, tax rates will remain relatively flat and stable. One more thing: we talk about $1 million houses because the math is easy. However, the median assessed value on Mercer Island is $700,000. The annual impact of the bond for at least half the houses on the Island is $490 or less (again before deducting from income taxes). Admittedly, this may be significant for seniors on a fixed income, but as Kris has noted above, there are tax relief options available and the current plan is the most economically feasible option we have. For our community as a whole, this is a very reasonable investment that will enhance our property values and benefit our children and grandchildren for the next 50 years.
Jackie Brown March 22, 2012 at 07:49 PM
Kendall, I agree that we should stay on top of this. Right now, all legislators are expressing support, and the McCleary decision has clearly had an impact in current budget negotiations, which appear to be steering clear of cuts to education. However, the real test will come over the next five years. Part of the McCleary decision focused on education reform efforts that were passed in 2009 and 2010 but for which funding has not been allocated. To comply with McCleary, these reforms must be implemented by 2017, but the cost could be in the billions. The question is whether the legislature and the voters in Washington are willing to increase education funding by the required amount. I'll believe it when I see it, and until then I will rely on the citizens of Mercer Island to make the right decisions about funding our schools. We can start by voting YES in April.
Kendall Watson March 22, 2012 at 07:55 PM
Yes, I'm not sure where “Total School Bond Cost to You $3.79” comes from. I think our story does a good job laying out how and where the $700 number and where the $3.62/$1,000 (or $3.59, $3.52 or $3.51/$1,000) came from by simply posting the MISD estimate. I'd caution using that $700,000 number, though (http://patch.com/A-qQQq). That's the median for ALL properties — including residential, commercial (including condos), land sales, ect. That may not be exactly representative of the median homeowner — but I grant you that it's got to be close. The County Assessor will release a residential-only report (excluding condos and commercial property) later in the year. Last year the assessed median value for a residential property was around $958,800 (http://patch.com/A-lhk8). It will without doubt be significantly lower this year (I'm guessing around $910,000).
Kendall Watson March 22, 2012 at 07:59 PM
I somehow doubt that the state's sales tax revenues will recover sufficiently by that point to allow the State Legislature to simply do nothing but wait for the money to flow back in. I'd welcome your input on a future story. Kind Regards, Kendall Watson Editor, Mercer Island Patch
Jackie Brown March 22, 2012 at 08:41 PM
Kendall, condo and commercial property owners also count as taxpayers and many commercial properties will be on the high side of the median. Also, the second Patch article you reference specifically says the "average" value was $958,800. The term "average" is almost universally meant to refer to the mean, not the median.
Kendall Watson March 22, 2012 at 08:43 PM
True and true. Good catch, sir.
Jim Stanton March 23, 2012 at 07:13 PM
As a senior I'm also very concerned about the maintaining the value of my house which in large part depends from the quality and reputation of the Mercer Island school system. $700 a year to protect and enhance the value of my house strikes me as a prudent investment.
Kendall Watson March 23, 2012 at 07:19 PM
Thanks Jim. Must be a nice house!
Candace Scarcello Dempsey March 23, 2012 at 08:44 PM
I am thrilled. By a 5-0 vote, the Mercer Island School Board decided last night NOT to rebuild Island Park on the Stevenson/Redeemer parcel. It takes a great school district to listen to its residents and change its mind when it's on the wrong course. Nice to know that the school board and Superintendent Plano consider public input important and relevant. I feel happy and relieved today. We all win because Island Park Elementary will be rebuilt on its beautiful spacious site. http://www.misd.k12.wa.us/news/frontpage/land.html
Kevin Scheid April 03, 2012 at 04:05 AM
Jackie, Mercer Island is paying off an approximate $30M, 20 year school bond which financed the school remodel at a cost of $0.55 per thousand. Can you explain how we can pay off a $196M, 20 year bond at a cost of $0.70 per thousand? The math simply does not work. The rate of $0.7 per thousand equals roughly $5.6 Million in taxes collected every year. 20 years of $5.6M equals $112M. So that tax rate will not pay the interest or the principle on the loan. $700 in tax payments for a valuation of a million simply is not true for the life of this loan, so what is the real amount we will pay for this loan?

Boards

More »
Got a question? Something on your mind? Talk to your community, directly.
Note Article
Just a short thought to get the word out quickly about anything in your neighborhood.
Share something with your neighbors.What's on your mind?What's on your mind?Make an announcement, speak your mind, or sell somethingPost something
See more »