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Letter to the Editor... Taxation without representation

To the Editor: No information for school district taxpayers; no public hearings specific to this problem; no public input on how their monies are spent; no "tax force" of knowledgeable citizens to attempt finding a solution to the problem; no pub...

To the Editor:

No information for school district taxpayers; no public hearings specific to this problem; no public input on how their monies are spent; no "tax force" of knowledgeable citizens to attempt finding a solution to the problem; no public vote on the bond issue. Why?

The [Cloquet] School Board has selected the "easy" way out of the unfunded retiree healthcare benefits by establishing a $7.1 million escrow fund, from which to pay the annual $430,000 cost of the OPEB liability.

This bond issue of 20 years is NOT tax exempt; thus the interest rate we will pay is not 4 percent as in tax exempt bonds, but at a higher rate of 6-7 percent. The cost of this loan over 20 years will "waste" $10-15 million in interest.

The trust fund of $7.68 million ($7.1 million plus $580,000) is "projected" to produce 4.5 percent interest, so that the fund could produce 37 years of payments of $430,000 per year. But, who can guarantee this amount of interest - it will depend on the success of the trust management. I have little confidence that this will occur. A 2-3 percent return is more realistic and this will not allow 37 years of payment.

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Instead of finding a way to reduce these benefits, the school board is willing to spend future taxes on interest - not good business. Why not work with those who are receiving these benefits to bring the costs down to a more affordable amount?

The proposal of setting up a trust fund is that it "frees" $430,000 from the General Fund, which can be used for "education." But I wonder if the employees will also look at those dollars as potential salary increases.

We have this unfunded debt problem because too much was given to school district employees in healthcare premium benefits. Why?

Our school district has done, on a smaller scale, what the city of Duluth has done. We must change these benefits, as is continually done by our industries. Many of us taxpayers have far less in benefits.

Paying "as we go" will save us the interest costs and will make the school board deal with the "reality" of the costs of operations.

There should be a task force of knowledgeable citizens who would work with the board to find a solution to this unfunded debt problem.

Our district has a bonding limit and this year more than $20 million is proposed - without vote. This is taxation without representation.

Call your school board members: Gary Huard, Jim and Sandy Crowley, Ron Gittings, Stephanie Hammitt and Duane Buytaert.

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Attend school board meetings specific to the problem.

David M. Johnson, Cloquet

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