PRC school board cuts back on funding request

Published 1:37 pm Thursday, September 9, 2010

The school board for the Pearl River County School District voted Tuesday night to cut back on its tax request to supervisors.

Even with the trimming, taxes are still going up in the school district to support its 2010-11 budget, which was hit hard by state budget cuts of more than $1 million and a reduction in the ad valorem tax base because of the recession.

If the assessed valuation drops, which it did in the district, a mill will generate less money than the previous year because of a reduction in assessed valuation.

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The board, at the insistence of school board member Bonnie Sanders, shaved 1.33 mills off what its ad valorem tax request to supervisors.

The equest goes to the board of supervisors this week to be adopted on Monday.

The county school tax is applied only within the PRC school district.

County Administrator Adrain Lumpkin, Jr., attended the school board meeting and briefed Supt. Dennis E. Penton and board members concerning the request.

He said the board had to present him with a resolution outlining the new request before Monday when supervisors plan to finalize their own county budget after a public hearing and adopt and set the county and school board millage rates.

What happened was that an original ad valorem tax request was sent to supervisors and Lumpkin said at a board meeting that it would take the application of 5.14 mills to generate the additional funds requested by the school board.

However, Sanders on Tuesday night said that she pushed for a re-evaluation of the budget after the school board received prospects of additional funds being available to them. She also requested that Lumpkin attend the meeting.

She mentioned an “insurance settlement” and the fact that there might be additional funding from the State Legislature.

The “insurance settlement” funds were a settlement pertaining to damage suffered in Hurricane Katrina. The board has been in negotiations with insurance companies over the amount owed the district and are just now being settled.

Penton told board members that the settlement had been deposited in the school board’s bank account but had not as yet been incorporated into the current budget. Neither the board nor Penton said how much the settlement amounted to.

In addition, Penton pointed out that the cash reserves will be at 25 percent by end of this budget year while the state requires only a 7 percent rainy day fund.

All during budget discussions this year, Penton wanted to dip into cash reserves to bring the budget into balance and the board did not want to, although members relented toward the end of discussions and decided to dip into it a little bit.

Penton maintained that was what the rainy day fund was for. A number of residents at the June 24 public hearing on the budget said they believed the board should use budget reserves before levying new taxes on homeowners.

Penton on Tuesday was asked by Sanders what he recommended now that financial prospects were looking better, and Penton said he was not making a recommendation to the board, that it was the board’s decision to set a budget figure.

In the end, board did levy new millage amounting to 3.81 mills. That will result in an estimated additional taxes of about $36 for homeowners on each $100,000 of appraised value, Lumpkin told the board.

Prior to Tuesday night’s change, residents were looking at about $56 of additional taxes on each $100,000 of appraised value.

Total millage, including the new millage applied this year, will amount to 59.51 mills, which is 3.81 extra mills over last year’s total of 55.70 mills. If the board had not cut the request on Tuesday night, the total millage rate applied by supervisors would have been 60.84 mills.

One of the problems that pushed taxes up was the drop in appraised value caused by the recession. Overall appraised value in the school district dropped by between two and three percent, and the county experienced a $600,000 to $700,000 drop in tag tax collections when residents cut back on large purchases because of the downturn in the business cycle.

If the school board had left the millage rates at the same level as last year, their collections would have dropped about $100,000, Lumpkin told the board.

In adjusting the budget the board pulled out about $145,000 in proposed expenditures, and during the year must make that up somehow. Members maintained the increase was at zero above what is termed base funding, while the original request called for a two percent increase in revenues over the base, collected on the local level through ad valorem taxes.

The board adopted the new ad valorem tax request by a 4-1 vote. Board president and member Twila Crabtree and board members Bonnie Sanders, Michelle Boyd and Jeff Jones voted in favor of the resolution and board member Sherwin Taylor voted against it.

Following consideration of 27 items on a long agenda, including the 40-minute budget discussion, the board went into an executive session to discuss legal and personnel matters.