Can We Have a Referendum?
ONLY UNDER SPECIFIC LEGAL CIRCUMSTANCES
At the QV School Board meeting held on 3/16/21, Jeff Watters (Region III, Treasurer) addressed the misleading issue of referendum by reading the following statement:
Tonight, I would like to turn to the topic of a REFERENDUM for the new HS project.
Some have wondered why the concept of referendum, contemplated 4+ years ago, is no longer a central feature of the District’s plans. At the most basic level, it’s because we are in a MARKEDLY stronger, more flexible financial position today than we were then. As such, the condition for fielding a REFERENDUM – namely a need to exceed Act 1 Tax and Borrowing limits imposed on us by the State of PA – no longer exists like it might have several years ago.
So what has changed?
Well, the extended search for suitable land, the protracted transaction process, a mid-stream change in Administrative leadership – and more recently the understandable distractions associated with a global pandemic – have all conspired to create a meaningful passage of time since the notion of REFERENDUM was first floated. The downside of this passage of time is further delays to a desperately needed new facility. But the delay has not been without meaningful silver linings:
First, and fortuitously, this passage of time moved us directly into the heart of a historically low interest rate environment. This, in turn, allowed us to adroitly retire and/or refinance millions and millions of higher priced debt over the last several years. In the process, we have reduced our debt load and debt service costs while expanding our borrowing capacity vs 2017 levels.
Second, we have spent the last few years listening to the community’s input about your ‘wants and needs’ for a new HS and working with thought partners on the most cost efficient and effective way of delivering on these objectives. Though this iterative scoping process is far from finished, it has helped us refine land utilization plans, optimize footprint design, and tighten budget assumptions. Thismhas given us confidence that we can deliver on the community’s mandate without piercing our Act 1 Tax and Borrowing limits.
Some in the community have suggested that we should use the Referendum as a non-binding ‘preference survey’ or ‘opinion poll’ to measure community support for the project.
The reality is that the State of Pennsylvania Election Code does not give election boards discretion to authorize non-binding Referendum questions on the ballot. In order to place a non-binding resolution on the ballot, there must be specific statutory authority to do so.
The fact is that there are limited instances and conditions where a school district is required to place a Referendum on the ballot regarding a school construction project. The QVSD high school project does not meet these conditions. More broadly in the state of PA, referendums on public school projects are neither common nor ordinary practice.
Though a referendum is not an appropriate remedy here, it is important to note that the District is required, by statute, to hold a public hearing on the high school project. And it is the Administration & Board’s intent to supplement our statutory requirements with a series of additional public review and comment sessions to ensure the community continues to have a voice in this process.
I hope this helps provide clarity on the topic of referendums. In the end, a referendum in the state of Pennsylvania is designed to address a math problem. At one point, under a much different fact set, this District may have had a math problem. With the passage of time and adroit financial stewardship, we no longer have a math problem. What we do have is a high school facility problem and the community support to address it together in a fiscally responsible, future-facing way.
Pennsylvania state law controls if and when a school district holds a referendum, an extremely rare occurrence in this state. A referendum can only be triggered if the district needs to exceed the maximum tax increase allowed by law (the Act 1 Index) or exceed the amount of debt allowed by law (Local Government Unit Debt Act).
The Board's new high school plan does not exceed the state-imposed financing and taxpayer limits. Therefore legally, a referendum would not be triggered.
Referendums are not used as opinion polls and in Pennsylvania, school boards DO NOT HAVE THE AUTHORITY to hold referendums based on community petitions.
Presented at the June 9, 2020 School Board meeting
by: Scott Antoline Director of Finance, QVSD and PFM Financial Advisors LLC