Claude

Paquin believes he has come up with the most

equitable plan for funding new school

construction in the form of long-term bonds.

Comparing

bonds to a sales tax, he has concluded that:

Bonds let you have

a precise amount of money up front at the precise

time you select.

Bonds spread the

tax burden over the people who enjoy the

expenditure's benefit as they enjoy it.

Bonds let

businesses share the burden.

School bonds carry

low interest rates because the interest is

income-tax-free to the investor.

The tax burden from

bonds is initially much lower, steadily

decreasing and generally deductible on income tax

returns.

For school bonds,

the tax burden reduces or stops at age 65.

Property tax

collections for bonds go 100 percent toward bonds

and thus, toward schools, with no commissions to

merchants or the state.

Paquin's

suggested recommendations to the Fayette County

School Board include 12 points. Some of the key

issues are:

establishing a

target limit of 24 mills for the total school

tax.

adding new schools

on a slow steady basis and financing them with

long-term bonds.

informing all

citizens about the bonds' impact on their taxes.

encouraging

donations and bequests to the school system.

holding school bond

referendums along with regular elections.

Paquin's

model for what a new school costs in property tax

is as follows: If a school costs $15 million and

the annual payment for each million borrowed is

$66,917, the total annual repayment is

$1,003,755. This is based on the formula that a

tax produced by one mill generates $2,650,000.

This

means that the initial millage needed per school

is 0.3788 mills. The tax from one mill for

household valued at $200,000 is $80. The same

household's tax for a new school is $30.30. With

a 33 percent income tax deduction, the possible

net cost is 20.30, Paquin said.

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