As you no doubt have read in local newspapers or heard via the broadcast media, it is being reported that OCPS may have made a major miscalculation in projecting the amount of money that will be raised through the half-penny sales tax increase, which we so strongly supported.

Here is a memorandum that Dick Batchelor, co-chairman of Change 4 Kids, recently sent to the school board and administration. Of course, you are welcome to communicate your thoughts to Chairman Rick Roach (roachr@ocps.k12.fl.us) and/or his colleagues and the Superintendent, Ron Blocker (blocker@ocps.k12.fl.us).

TO: Chairman Rick Roach, Orange County School Board
FROM: Dick Batchelor
DATE: December 18, 2002
RE: Sales Tax Issue

Dear Rick:

Since you, your colleagues, and Superintendent Blocker and staff are attending a School Board retreat, I felt it timely to bring this matter to your attention while you’re holding such a forum. I ask that you share my memorandum with them.

As the co-chairman of Change 4 Kids, as we discussed by phone, I was quite surprised and upset to learn that OCPS’s projection for sales tax revenues might have been inflated by somewhere between one half billion and one billion dollars. After hearing this from a reporter, you, Dr. Boekhoff, Frank Kruppenbacher, Jackie Johnson and I had a chance to briefly discuss whether or not such a disparity exists. While I recognize different economists and financial advisors might have some variance in their financial projections, the reported difference is absolutely unacceptable and needs to be clarified in the interest of the Orange County taxpayers.

It would seem to me that one would simply check with the Department of Revenue to find out how much one-penny in sales tax generates in Orange County. Then, assuming the $15,000 cap that was part of the resolution, one would predict a conservative gross factor, particularly in light of the severe economic downturn post 9-11. Using a guarded approach with very few variables, one should have been able to project a relatively close number.

While there is some disagreement and public debate as to how empirical and reliable these projections are, I believe it is essential that the school board, in a public work session, have staff review the exact approach they used, including the sources of the data for any econometric modeling that was done. For instance, while some data was gathered through the Bureau of Economic Research (database) at the University of Florida, were those gross assumptions totally reviewed by your financial and audit staff? Inasmuch as the school board also retains an outside financial advisor and two outside accounting firms, did any of these professionals participate in the process of arriving at the numbers used in the projections?

I believe that a public forum would afford an opportunity for these and other appropriate questions to be answered and OCPS to defend such projections in order to re-instill some confidence in the process that was used. It is critical that the public be fully informed as to what the ironclad projections are for the sales tax collections over the 13-year life of the ballot issue. Further, because of the confusion in the press surrounding these numbers, it certainly automatically raises the question as to which school(s) would not be built and/or repaired if, in fact, the projections are off by any substantial amount.

As you know, as the co-chair of Change 4 Kids, I worked with a tremendous amount of people in this community – a great number of whom were very reluctant to support a sales tax. However, because of the demonstrated need and construction accountability offered by COVE, the public was convinced that there was a need, the half penny sales tax was the appropriate funding source, and the construction and financial oversight would be in place to ensure the dollars were spent correctly.

We now find ourselves in the midst of a public debate as to whether or not the revenue stream is sufficient to meet the goals that Change 4 Kids, relying on the school board administration, represented to the public.

In short, the public deserves a full explanation as to the amount of revenue sources and whether what we represented to them during the campaign is in fact “doable.” Let me hasten to point out, with some hope that we can arrive at a comfort level with the school board’s projections, that if there proves to have been a substantial error in accounting resulting in an unintentional misrepresentation of the schools that would be build and/or rebuilt, it will be incumbent upon the school board to find a way to fulfill that commitment.

While I recognize that funding sources are limited and that issuing debt against sales tax revenue increases the price of construction, OCPS owes it to the public and particularly those who supported this effort to develop a plan whereby the promises made will be kept!!

I look forward to your immediate response to my suggestion for a work session (revenue estimating conference) where we can fulfill the obligation we all share with the public.

As always, I appreciate your consideration.