The dip in property taxes in San Diego County will slow down the $2.1 billion facilities bond for revamping San Diego Unified schools, costing the school district more money over time and extending the number of years it takes to unroll the planned projects, staffers said yesterday. The difference means at least $50 million less flowing in to pay for renovations and building in the next two years.
Planners for Proposition S had originally expected that the assessed value of property in the county would grow 5 percent annually for the lifetime of the bond. Higher values mean that the school district reaps more money from the taxes that voters approved in November. But the property taxes are now expected to drop, as Kelly Bennett reported earlier this month.
Now the school district is redrawing its plans, based on much more modest assumptions about how much it will reap in property taxes annually. It now assumes it will see a 1.3 percent drop in property taxes in the 2009-2010 school year and no growth in 2010-2011, an assumption based on the county numbers and the historic trend that properties within the San Diego Unified boundaries see more growth in value than properties countywide.
That, in turn, means that the school district estimates that it will pull in only $100 million next year, instead of the $125 million it planned for and $75 million in 2011 instead of $100 million — a difference of $50 million over the next two years alone and an estimated $95 million by 2017. It will still reap $2.1 billion over time — but it will take longer to do so.
Getting less money than it expected in the coming years will force the school district to delay some planned projects, stretching its plans over at least 16 years instead of 10 years, as originally planned. Each year of delay could cost San Diego Unified roughly $60 million in interest on the bond projects, said Stuart Markey, who oversees Proposition S in the school district. His department is still determining which projects will be delayed because of the shortfall, and it could extend the timeline even further.
“We’re struggling with how to make sense of it,” Markey said.
The original assumptions for growth in property values were one of the criticisms raised by Pat Flannery, a real estate broker who led the opposition campaign to Proposition S. In an article last October, Flannery called the 5 percent plans unrealistic.