The real estate market boomed, but the school went bust

MACHIPONGO

The real estate stampede that brought soaring land values, golf communities and waterfront vacation homes to the Eastern Shore's lower peninsula has left its schools in the dust.

Northampton County steadily lost students over the boom years and received very little of the windfall from escalating property prices.

Instead, the school budget is in peril, forcing drastic cost-cutting that has shuttered the county's only middle school. That decision has vexed this sprawling but tight-knit community of farms and resorts with panoramic water views juxtaposed with some of the worst poverty in the state.

Northampton Middle School will stand this fall as a reminder that a community doesn't always benefit from increasing wealth.

The reason: Real estate assessments lagged during the peak period.

This year, county officials found out that they will receive about $1.8 million less than expected from the state to fund the school system's $22 million annual budget. They also stand to lose $60,000 from the federal government.

By the state's calculations, Northampton County should have been collecting tax revenues from land worth

$2.84 billion and, therefore, could afford to shoulder more of its schools' bill.

In reality, Northampton collected much less because at that time, property was assessed at less than 45 percent of the market value.

"I feel like my county has failed me," said Jennifer Ingram, the mother of a rising sixth-grader, "and I feel like they've failed my son."

Northampton County begins where the northern point of the Chesapeake Bay Bridge-Tunnel ends.

About an hour away from downtown Norfolk, it unfolds in spiky fields of corn and squat patches of soy that conceal beaches with gentle waters.

Signs beckon travelers: Fireworks! Virginia hams! Pecans! And restaurants with names such as Yuk-Yuk & Joe's and Sting-Ray's serve up meatloaf and wahoo burgers.

The county's communities range from the touristy Cape Charles and historic Eastville to Cheriton, a town advertised as "the real Eastern Shore" - a place to meet some really nice people.

"Why people come here, why they fall in love and choose to buy a home here or a second home, is its open space," Northampton County Administrator Katherine Nunez said. "It's very scenic and rural."

Farming and fishing have always formed the economic backbone for this county of around 13,500 people. But as these industries decline, Northampton County is often named among Virginia's poorest localities.

The most common occupation on the Eastern Shore is cashier, according to a 2007 report from Virginia Tech's Office of Economic Development. The average annual income in Northampton County is $31,876.

Only three companies employ more than 250 workers: Bayshore Concrete Products, the hospital and the public school system.

But there is plenty of land.

For years, its remoteness kept big developers away. Then, bridges were built, and land in nearby communities became less abundant.

When property values spiked across the nation in the 2000s, the waterfront land on Virginia's Eastern Shore became one of the hottest deals going - especially for speculators who hoped to quickly sell the property for even more. Advertisements appeared as far north as New York City.

According to the Virginia Department of Taxation, between 1999 and 2005, land values in Northampton County more than tripled to $2.84 billion.

Some on the Shore thought the new riches would unlock a prosperous future - new jobs, lower real estate taxes - for people who had lived and worked there for years.

Others worried the burgeoning wealth would push the locals down and out - especially those in the public school system.

"It was gambling, like oil futures," said Mary Miller, vice chairwoman of the county's planning commission. "We were just blindsided by it here."

 

For Northampton locals, as in many places, the schools anchor the community.

Twin elementaries, built from the same design in 1993, bookend the middle school and the high school, which are both more than half a century old. Former teachers and students still remember when the Northampton Middle School building served as the county's black high school.

Today, students can take business classes at the high school's Center for Careers and Technology or ride up to Accomack County for dual-enrollment courses at Eastern Shore Community College.

There are blood drives, flea-market fundraisers and a high school version of "American Idol." On the day in May that a bomb threat closed the schools, teachers rode buses with the younger students to make sure someone was home with them.

Northampton schools have performed relatively well: All but one met state benchmarks for standardized tests taken in 2007. The middle school missed the mark in math.

Persuad ing teachers to stay, however, has been difficult because school divisions in Hampton Roads and in Maryland pay higher salaries.

For years, the school system also has struggled to keep students, whose families left in search of better jobs. When property values soared in the 2000s, more families were priced out of their homes as rents and mortgages climbed.

Some of the prosperous favored local private schools, where enrollment has gradually increased. Some paid to attend the public schools in Accomack County, while others taught at home.

The schools felt the flight. Between 2001 and this spring, the average number of students attending Northampton County Schools dropped by more than 350 - down to about 1,800.

The proportion of lower-income students remained high: About 67 percent qualified for free or reduced-price lunches last year, a benchmark for poverty.

 

The school system's recent troubles began with the 2004 property reassessment.

The assessors hired by the county calculated Northampton's total property value at $1.25 billion. However, based on sales figures the next year, the Virginia Department of Taxation estimated the worth at nearly $3 billion.

"Things were turning over so quickly that they just weren't able to capture the market," Commissioner of Revenue Anne G. Sayers said. "We had property that turned over in Cape Charles three times in one year, and everybody made $200,000."

The sales figures worried Sayers as early as 2005. She saw more expensive properties in the southern end of the county assessed at around 30 percent of their sales value, compared with around 70 percent farther north.

Sayers recommended a reassessment. But Northampton's Board of Supervisors chose to wait, said Jeff Walker, the board's current chairman.

Walker said they knew another assessment would begin within two years, at a cost of about $300,000. Virginia law allows counties as small as Northampton to conduct reassessments at six-year intervals.

"We knew another one was right around the corner," Walker said. "No one realized what the impact was going to be."

In a typical year, more than half of Northampton County's budget goes to its school system.

Virginia public schools are paid for by a mix of federal, state and local money. Every two years, Virginia Department of Education officials determine the dollar amount needed in each locality to maintain educational programs that meet the state's minimum quality requirements. They calculate the state's portion based on this determination. Localities can - and often do - pay more than their minimum requirement.

State officials use an equation that weighs estimates of a locality's ability to pay for its schools with its number of students. By these calculations, areas with high property values and low student enrollment must shoulder more of their school system's budget.

This year, Northampton's portion of its state-required school budget jumped more than 15 percentage points - from 39.3 percent to 54.8 percent - the biggest increase among the 136 Virginia school divisions and localities that receive state funds for public education. By comparison, Virginia Beach pays 37 percent of its school budget.

County leaders said they weren't prepared to make up the $1.8 million difference, which equates to about 8 percent of the school division's annual budget.

"I was shocked," said Richard J. Bowmaster, who has been the Northampton County schools superintendent since 2007. "We just thought, 'This is going to devastate us.' "

For parents, news in the spring of Northampton Middle School's closure hit like a bomb.

"I wondered why they were doing it, because that school has been there since I went there," said Yvonne Picott, 43, a teacher's aide with the Head Start program.

Though officials had considered closing the school because of declining enrollment, the plan was a year or more away. The state's cuts, coupled with an expensive, recently discovered problem with the building's foundation, accelerated their timeline, leaders said.

This fall, sixth- and seventh-graders will attend the elementary schools, and eighth-graders will go to the high school. Officials also eliminated about 20 jobs and gave teachers raises of 2 percent or less.

The School Board approved the closure and other cuts at a March meeting during which people spilled out of the room, with one man offering public comments through a window.

"I don't think I knew how tragic the situation was until just before that hearing," said Ingram, the mother of a rising sixth-grader. "It's hard when you're part of the community and you feel like you have no say."

In the following months, parents worried about how the plan would affect their children.

Bob Bisker fretted about gifted education at the high school for his eighth-grade daughter.

Steve Corman wondered about challenging classes and the sports program for his seventh-grade son.

Alyce McKissick hoped the elementary school would meet the special education needs of her seventh-grade son, Reginald Chavous.

Some questioned the county's recent choice to spend a total of $30 million on a new jail, social services building and courthouse complex. Others blamed the under-assessment of 2004.

Residents asked why the county didn't predict the shortfall sooner.

That would have been impossible, County Administrator Nunez said. Localities can't determine the Virginia Department of Education's funding in advance because the formula includes statewide trends as well as local statistics, she said.

"For us, the point is we balance a budget," Nunez said. "I don't go raise taxes just to create a pool of money for the future."

Some say Northampton might have better controlled the land boom - or the community might have benefited more from it - if zoning maps had been drawn differently decades earlier.

Developers were allowed to build new neighborhoods throughout the county - usually without having to request rezonings. If rezonings had been required, county leaders might have accepted school contributions as a condition for approval in some cases, said Miller of the planning commission.

However, not everyone believes the use of conditional zoning provisions would have helped.

"I don't think that alone would have solved the school problem," said Northampton County Planning and Zoning Director Sandra G. Benson.

Leaders now are taking action to position Northampton for the future.

They recently updated the county's long-term development plan. They also are working on zoning changes to better control development outside of its town centers.

Another priority is working with educators to strengthen Northampton's work force, with the hopes of attracting and retaining more companies and boosting the student population.

The county's latest reassessment took effect this year. Northampton's total assessed land value jumped to $2.79 billion. Residents will pay 49 cents per $100 assessed value, an effective rate increase of 13 cents, in part to fund the school system.

Most bills will double, Sayers said.

Meanwhile, officials are trying to figure out what to do with the middle school building.

Walker doesn't want to make drastic changes to it, in case student enrollment rebounds and the county can afford to reopen the school.

"We always keep that in the back of our mind," he said, "that we may need that building in the future."

Amy Jeter, (757) 446-2730, amy.jeter@pilotonline.com