( 3 Votes )

Out of the great tax debate came an idea: If people want to pay more in “taxes,” why not let them? Drawing from a program established in Prince Edward County, Supervisor Bob Ullenbruch championed the idea of voluntary “tax” contributions here in Fluvanna. Through this program, citizens who want to support different county departments, most notably the schools, can do so by choosing to pay above and beyond their required taxes.
“The voluntary contributions program gives folks with a passion – whether it be schools or public safety or parks and recreation – the ability to contribute extra dollars specifically towards that passion,” Ullenbruch said. The system seems like a win-win: Citizens who want the tax rate to stay lower pay a lower rate, while citizens who want the tax rate higher support their cause with voluntary contributions.
But to critics, the system is lose-lose. If the program brings in little money, critics fear proponents of lower taxes will cry triumphantly that the majority of the county must feel that the schools are adequately funded as-is. If the program brings in a lot of money, critics fear proponents of lower taxes will continue to “underfund” the schools and rely on those who disagree to bridge the gap through “charity.”
To Ullenbruch, that’s just being negative. “There’s nothing negative about this program, nothing but positive,” he stated. “It gives people that stood up and said ‘raise my taxes’ the opportunity to contribute where their heart is.”
Does it work?
Ullenbruch especially likes that the program, as he says, sets up the schools to receive donations in a manner in which they currently cannot. “People can donate supplies to the schools, or athletics, but they can’t give to increase programs or things. The voluntary contributions would give the superintendent the autonomy to spend the money where she sees fit.”
But, as so often happens, there is a disconnect between facts as asserted from those outside and those within the school system. When asked to clarify, Superintendent Gena Keller stated that the schools are already set up to receive monetary donations towards operations. Would-be donors may simply write a check to Fluvanna County Public Schools. Such funds go into the category called “other local revenue,” as would any donations collected through voluntary contributions. In fact, funds donated through voluntary contributions, rather than a direct check to the school system, must first go through the extra step of being appropriated to the schools by the Board of Supervisors.
Earmarking donations
Knitting together the voluntary contributions idea into a workable system for Fluvanna is using up many county staff hours. One tough issue is deciding how specific the earmarks can be. In the June 5 meeting of the Board of Supervisors, County Attorney Fred Payne massaged his temples at the thought of accounting for a $500 donation for girls’ lacrosse mouth guards.
In the case of the schools, the answer is clear-cut. “There is no way for a donation to the schools’ appropriated accounts to be specified for a specific use such as salaries, bus fuel, health insurance costs, etc. We’ve checked this with our School Board legal counsel,” said school Director of Finance Ed Breslauer.
Why not? Well, the law has the first and final say. But as an example, Breslauer added, “If someone gave the school board $1 million to pay salaries but utility expenses were higher than expected, the school board couldn’t sit on the $1 million and turn off the heat/water/sewage.”
If donating outside of the operations budget is near and dear to a citizen’s heart, the schools already have a mechanism in place for that as well. Each school has an activity fund ready and waiting for donations that are spent on “supplies, day-to-day needs, etc.,” said Keller. “PTOs/PTAs do this as well.” Also, the Fluvanna Education Foundation (FEF) provides a valid option. According to the school system’s web site, the FEF is “a separate entity from Fluvanna County Public Schools and the Fluvanna County School Board, with a separate board that exists to support the mission of the public schools. It can receive and spend on local educational initiatives without altering the School Board budget… Donations are tax deductible.”
Personnel expenses
Of all the expenses that pull at the community’s heartstrings during the annual budget battle, teachers’ compensation tops the list. Most often cited as the reason for (and against) school-related tax increases, personnel expenses include everything from teacher positions themselves to raises, cost-of-living adjustments, and health and life insurance premiums. If voluntary contributions are a kind of compromise on the tax rate, as some perceive them to be, then it is worth noting that none of these personnel expenses can be covered by voluntary contributions or, for that matter, any other form of donation to the school system.
There are several reasons for this. Firstly, as discussed previously, the schools cannot handle restricted monetary gifts – that is, gifts with strings or purposes attached. Second, there is no way to know how much money the school will receive through donations. “It would be very risky to plan a budget on ‘what you might get’ from the contributions of community members,” noted Keller. So why not save up donations and apply the actual amount towards personnel expenses the following year? “School boards do not have the legal authority to carry forward funds from one fiscal year to another without the approval of their local appropriating government body,” the Board of Supervisors, clarified Breslauer.
So actual taxes still provide the only funds with which to compensate teachers. Knowing this, Ullenbruch stated clearly that voluntary contributions are “not meant to be a compromise.…If your passion is that we increase taxes then deal with that during budget season. This has never been intended to be a substitute for that… It’s definitely not in place of budgeted items. I want to make that clear.”
Does it help?
In the case of the school system, voluntary contributions duplicate existing methods of donation. Simply writing a check to a school’s activity fund, the school system itself, or the FEF accomplishes the same thing, and more simply, than donating via the voluntary contributions system. Not many counties utilize this system, and according to County Administrator Steve Nichols’s research, the ones that do don’t generally bring in enough money to pay for the required staff time.
On the plus side, once the idea is fleshed out into reality, donating to the schools may get more publicity. Not many people are familiar with the ways to donate to the school system. (That information may be found here: http://www.fluco.org/finance/SitePages/index.aspx) Surely citizens will become more familiar with the idea if Nichols’s hope becomes reality and they can go online to pay taxes, check an extra box or two, and make a donation.
And what about the win-win or lose-lose debate? If the county implements voluntary contributions, thereby accepting the probable net loss of staff hours, then the accurate response probably lies somewhere in the middle. As long as the county: 1) continues to fund the schools at an “adequate” level (which is always a matter of raging debate), 2) refrains from relying on voluntary contributions to bridge any kind of gap, 3) avoids expressing any sense of entitlement to donations, and 4) has realistic expectations about the revenue this program will generate, then the way is clear for citizens to help the causes they truly believe in by giving as they see fit.