Budget woes, fiscal problems dominate this week

Published 3:42 pm Tuesday, July 17, 2012

While the Associated Press reported that state coffers are experiencing an increase in revenue, local government entities continue to scramble to find enough tax monies to make revenues match expenditures for the upcoming new fiscal year. Some officials are saying the State Legislature pushed too many expenses down onto local supervisors, cities and school boards during the last legislative session. Couple that with falling property values caused by the Great Recession, and you have a budget crisis for local government and school boards.

The new fiscal year for local government entities runs from Oct. 1, 2012, to Sept. 30, 2013.

Pearl River County supervisors will meet on Wednesday at 9 a.m. in Poplarville and continue their budget discussions, a town hall meeting of concerned citizens about local budget woes is planned for 7 p.m. Thursday at the Link on Goodyear Boulevard in Picayune, and the Picayune City Council holds the first of several budget workshops on Tuesday at 3 p.m. to begin hammering out the new fiscal 2012-13 city budget, followed by a 5 p.m. City Council meeting, during which the council is expected to consider a request from the Picayune school board for additional millage to shore up a sagging school budget. The City of Poplarville also faces hammering out a new budget.

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The Picayune school board, in a rare split vote last week, voted 3-2 to ask the council to levy an additional three-to-five mills to help raise more revenue to support the budget because falling property values will result in collection of less monies if millage remains the same. The City of Picayune handles the school tax revenue collections and passes it along to the school board.

That means homeowners will have to forego what would have been a slight reduction in ad valorem school taxes if the millage rate had remained constant.

The Pearl River County school board at Carriere and the Poplarville school board both decided not to raise millage rates and to dip into their cash balances to make up the difference.

However, the Carriere and Poplarville school boards have a much greater cash balance than Picayune, thus the difference in tax policies.

Picayune officials said last week, after the Picayune school board voted for the tax millage rate hike, that they would pass it along to city homeowners, saying they had no choice under state law. They said they could not refuse the request.

PRC supervisors will most likely continue budget discussions on Wednesday as they continue to deal with a current budget cash balance shortfall of $500,000 for the current fiscal year and also face a revenue shortfall of close to $1 million as they prepare to hammer out the new fiscal year 2012-13 county budget.

The county budget crisis surfaced on June 11, and supervisors then moved to cut expenses drastically and clamped on an employee furlough program that will force county employees to take one day off each two-week pay period. Supervisors were trying to free up $500,000 to cover a year-end shortfall in revenue, they said was caused by overspending by departments.

Supervisors, however, were criticized for not “riding herd” on budget expenditures during the year.

When Picayune businessman Dub Herring last week sent county officials a $8,750 check to cover a year-end fourth quarter cut supervisors had imposed on the Picayune Animal Shelter, trying to shore up a dwindling current cash balance, supervisors for a few days rejoiced, but the fact remains that the county right now needs a lot of tax revenue and can’t rely on benefactors like Herring, the founder of Dub Herring Ford and Paw Paw’s Camper City, although Herring’s actions were laudable and magnanimous.

Private citizen Joseph Dodd appeared before supervisors in June, asking them to take a 20 percent pay cut to show leadership, and after supervisors refused, Dodd told them he was preparing to hold a town hall meeting in Picayune on Thursday, July 19, at 7 p.m. Dodd is a student at Pearl River Community Çollege and said he was interested in politics and local government.

However, it remains to be seen what impact Dodd’s efforts will have on the current local fiscal crisis, or how much interests his town hall meeting will generate on Thursday night.

Supervisors have an immediate revenue problem that has to be faced. Supervisor Anthony Hales, Sr., has suggested implementation of a countywide one percent sales tax to shore up county coffers, but even if he and supervisors get that adopted, which seems unlikely because it has to go through the state legislature, it would be too late to help with current budget woes.

The State Legislature was accused of underfunding the schools last session, and now it seems while the local school boards and board of supervisors are scrambling to find tax resources to cover budget shortfalls, the State Legislature is experiencing a flush of new tax monies, as the economy picked up slightly, the AP is reporting. Money has flowed in from state sales taxes, in which county and school boards don’t share, while cities get a sales tax rebate from the state that covers up to 50 percent of their budgets. That forces county’s and school boards to depend solely on ad valorem land and home taxes, which some say is unfair. They say the sales tax is painless, but the tax on homes is regressive.

Hales has complained that local homeowners are tapped out on residential land taxes and can’t handle anymore, and that is the only source of new tax revenues for the county, while the state and the cities gobble up all the sales tax revenue and won’t share it. Hales maintains even if the State Legislature passed a one-percent sales tax proposal and gave it to the counties, the sales tax here in Pearl River County at 8 percent would still be lower than sales taxes in nearby Louisiana. Many PRC residents shop in Louisiana despite the higher sales tax there.

The Associated Press reported that year-end state sales tax collections were $250 million, or 5.5 percent higher than expectations. Compare that to what is projected to be a $1 million shortfall in taxes in Pearl River County and a $700,000 shortfall in tax revenues in neighboring Hancock County, both shortfalls caused by plunging property values caused by the Great Recession.

Many now believe the 2013 state budget was underfunded by legislators, especially in the area of education, causing many school boards to dip into their cash balances.

Said House Appropriations Committee Chairman Herb Frierson (R-Poplarville), “Used to be, we’d have a feeding frenzy with this kind of money on the table. We’re not going to spend it on recurring expenses.” He said the state’s reserve funds need to be replenished.

However, some legislators, reported the AP, think the $250 million should be put to good use before the current fiscal year ends.

Said Rep. Cecil Brown (D-Jackson), “We cut $250 million from K-12 — and districts have dipped into reserves. And we were way short on health care.”