LaBrae Local Schools is reducing the rate of taxation in 2017 on the outstanding debt incurred when the District built the LaBrae Complex. The construction costs for building the new LaBrae Complex were acquired, as is typical with capital improvement projects of this magnitude, through the sale of bonds on the market. The original debt was refinanced in 2011 so the District could take advantage of historically low interest rates. The refinancing of the debt saved the District, and subsequently, LaBrae taxpayers, $631,644.17 in interest over the remaining 13 years on the debt.
In 2017, LaBrae Local Schools is able to compound the aforementioned savings by initiating the return of unused principal from the bond levy to the taxpayers. The 2017 tax rate on the LaBrae bond debt will be reduced to 5.0 mills of taxation. The 2016 tax rate on the bond debt was 5.7 mills of taxation. This reduces LaBrae's overall tax millage from 56.5 mills in 2016 to 55.8 mills in 2017. What does this mean for a property owner in our community? The owner of a $100,000 home would have paid $199.50 in taxes for the bond levy in 2016. The tax paid will decrease in 2017 to $175 due to the reduced millage. While the savings are not overly significant on an individual taxpayer basis, they are monumental for the community as a whole.
The District is able to return the remaining unused principal, because the construction of the building project came in under budget. Moreover, the reduction in the tax millage on the bond levy results in less tax revenue to repay the annual outstanding debt payments. This unused principal will supplant tax revenue lost when lower tax rates on the bond levy are provided to LaBrae property owners. Each year LaBrae Local Schools evaluates the tax revenue from the bond levy and sets its tax rate with the Trumbull County Auditor's Office to ensure that the rate will generate enough money to make the coming year's debt payments. The last debt payment will be made in December 2024, which will mark the expiration of the bond levy.
Over the remaining life of the debt, and beginning with the 2017 tax year, LaBrae Local Schools will annually return a portion of the unused principal, $650,000 in total, to LaBrae property owners. Annual tax revenue, property values, and delinquency rates on property tax collection are critical factors that help determine what the taxation rate will be for each tax year. LaBrae Local Schools will continue to manage this revenue in an efficient and responsible manner, and with a keen sense of awareness of returning to our constituents every dollar possible.
Should you have questions regarding the information herein, please do not hesitate to contact the Superintendent or Treasurer at 330.898.0800.