Pulling out all the stops to save a rural school (Part II): Might new buildings stave off schools' closure?

I wrote a few days ago about the lawsuit brought by the Deer-Mt. Judea School district in Newton County, Arkansas, seeking to prevent being forced to consolidate with the larger, neighboring Jasper district. It appears that the lawsuit will fail, but a recent issue of the Newton County Times (March 30, 2011) reported on a new tack by the school district to save itself from consolidation. The district called a special election to "approve a $1,550,000 refunding and construction bond issue for the purpose of refunding the district's outstanding bonds, dated Sept., 2000 and Sept., 2003, and to provide approximately $1 million for acquiring land, and constructing, refurbishing, remodeling and equipping school facilities." Though the bond issue will result in additional funds for the purposes of improving school facilities, it will not raise the tax rate that the district's property-owners pay to finance the school, which is 33 mills. (The story notes that the state average is 37 mills). This is because of the refinancing of some of the existing bonds. The April 13 issue of the newspaper reports that the bond issue was approved by "qualified electors" in an April 12 election, by a vote of 252 to 193. Thus, the district's residents have committed to taxing their property at the existing rate for a longer period of time in order to enhance their school. This is an unusual move in Newton County, where citizens have historically been very reluctant to levy property taxes above a bare minimum, whatever the cause.

So, what does this move have to do with school consolidation? Well, it appears that part of the motivation for the enhanced physical infrastructure is the hope that it will ward off some possible consequences of consolidation. In particular, the school district seems to anticipate that it will be forced to consolidate with the Jasper School District--probably in the very near future. If it does consolidate, the Mt. Judea and Deer schools seem to think that Jasper will be reluctant to close those schools and bus the Mt. Judea and Deer students to Jasper if it means abandoning nicer and newer buildings.

Here's what the Newton County Times story reports based on comments by Christopher Beardsley, the Deer-Mt Judea School District's "fiscal agent."

Beardsley said another motivator for passing the bond issue is that it would allow the school district to leave its buildings in the best possible shape.

That might encourage the receiving school district to leave the facilities open. But, Beardsley emphasized, "I would never tell a voter that if you vote yes for this that they are going to leave your building open. There's no guarantee that's how its going [to] play out ... We could not make that promise to the voters. We would make that clear."

Responding to another question, Beardsley said that, generally, at first the consolidated school district's tax rate remains the same. Then in its first full year it is voted the larger district's millage.

I was in Newton County last week, and I passed through both Deer and Mt. Judea as I traversed the county to conduct some oral history interviews for the Pryor Center for Arkansas Oral and Visual History. I had a chance to take these photos of the Mt. Judea School, and also to consider how much change the county's education system has absorbed over the years. Some of the elderly people I interviewed referred to schools in places like Union Grove and Parthenon--schools closed long ago, as they were presumably consolidated into larger districts. Some of those once "larger" districts now face consolidation themselves.

P.S. Another interesting thing about this story is an explanation of why it is beneficial for the school district to issue these bonds now: The American Recovery and Reinvestment Act of 2009 (ARRA) allows "school districts to issue debt with little to no interest cost to the district." Using this Qualified School Construction Bonds aspect of the ARRA potentially saves "the district $1.1 million in interest costs over the life of the issue." This permits the district to borrow the additional funds, while restructuring the old debt, without a tax increase. I note this because the Newton County Times has typically been negative about the ARRA, yet in an editorial in the March 30, 2011 issue, the paper urges voters to approve the bond issue and touts the benefits of the ARRA for these purposes.