A bill creating a countywide taxing authority that utilizes debt sharing between residents of the former Oktibbeha County School District and former Starkville School District on July 1 now awaits Gov. Phil Bryant’s approval.
As filed, HB 572 originally was a consolidation bill for the upcoming Holmes-Durant Consolidated School District, but a Senate Education Committee amendment added specific taxing instructions for Oktibbeha County.
The additional language creates the Starkville-Oktibbeha County Consolidated School District’s countywide taxing base — all taxable property within the entire county — and states both former systems’ outstanding debt “shall be assumed and become debt” of the newly formed district when they merge this summer.
Oktibbeha County has about $350 million worth of assessed property within its borders. With homestead exemption waivers applied, an OCSD mill brings in about $64,639 (about $70,000 without), while a city mill yields about $254,842 with the same exemption (about $280,000 without), officials said.
OCSD currently operates a 58.92-mill budget in which 2.92 mills are allocated for debt service, while roughly 14 mills of SSD’s overall 66.57-mill rate are set aside toward indebtedness.
Since the value of a mill will increase once a countywide rate is established, those who live within SSD’s territory will see a slight decrease in taxes, while residents of the former county school system could see their taxes decrease by about 4 mills.
Rough estimates, however, show spreading indebtedness equally across the county could mean current county school district taxpayers would face an overall increase — the 4 mills saved would be negated by an almost 9-mill increase — while city taxpayers could experience about a 3-mill decrease from their current rate.
Ultimately, it is believed a countywide tax rate could fall between 63-64 mills, but exact figures were unavailable Thursday.
The House concurred with the Senate’s amendment by a 101-14 margin Monday, and both chambers signed the enrolled bill Thursday.
Action is due from the governor by April 1.
Debt sharing became a rallying cry by those who forced a proposed $13.2 million OCSD construction bond to a referendum earlier this year. Many who signed petitions circumventing Conservator Margie Pulley’s ability to issue the bond said the debt burden should not fall entirely on the shoulders of residents within OCSD’s territory.
Calls for an election became moot when Pulley rescinded the intent notice in lieu of a voter base generally opposed to the measure — the bond was not expected to pass since 60 percent approval was needed to move it forward, and already 20 percent of the electorate called Pulley’s issuance into question.
Historically, OCSD’s electorate has not supported school bonds.
With the money, officials would have procured local funding for a one-of-a-kind demonstration school on Mississippi State University’s campus. The university previously pledged $5 million and 43 acres for the proposed 102,000 square-foot, grades 6-7 school. As proposed, all city and county pupils would have attended the demonstration school.
Even without construction of a new campus, all students within Oktibbeha County will utilize other sites in both former school districts. West and East Oktibbeha County elementary schools will continue to service outlying county kindergarten through sixth grade students, while county pupils will attend the city campuses home to seventh through 12th grades.
School officials and state representatives both said the combination of two school systems should create a system where students share resources and taxpayers equally foot the bill.
“Since all the kids (will eventually attend city school campuses), then everybody should be paying their fair share,” said state Rep. Gary Chism, R-Columbus, who sits on the House Education Committee.
Consolidating debt service also eliminates a potentially convoluted process in which older debt would have been retired by separate taxing bases and rates in addition to a countywide levy.
“This bill puts both of our debts together and divides them equally. The county will help pay for ours, and we will help pay for theirs,” said SSD Superintendent Lewis Holloway, who will become the consolidated school district’s leader on July 1.
“It’s the right thing to do,” he added.
Hurdles still exist
Moving forward, the combined school district could attempt a future construction bond for the school, one that would require a lower tax increase since the value of a mill increases July 1.
A potential tax increase would be shouldered by all residents of the county, but a referendum is not expected during this election cycle.
Plans for the demonstration school were developed by the Commission on Starkville Consolidated School District Structure, the merger study group created by the legislature in 2013. Besides building the new school and closing the county’s two high school campuses in favor of sending those students into the city, the group did not suggest building any additional facilities.
Since new construction is off the table for the 2015-2016 school year, the consolidated school district will face capacity issues that could drastically impact student-teacher ratios.
“July 1, we’re going to be out of capacity unless we do something extremely creative with Overstreet, but that’s not on the table. We looked at (sending a middle school grade) there, but it doesn’t make sense logistically because it’s easier to float additional teachers than it is to float services (like food deliveries),” Holloway said. “When we bring in 200 students to (Starkville High School), we’ll be maxed out there, too. There’s no capacity for growth until the (grades 6-7 demonstration school) is built.”
If funding sources can be secured — that’s still a big if considering the current SOCSD-MSU plan requires a pledge from the Legislature — the school could make a number of changes to alleviate the influx of students: SHS would service sophomores, juniors and seniors; grades 8-9 would be bundled together; grades 6-7 would attend the demonstration school; and the county’s elementary schools would have more capacity.
Holloway said he is optimistic lawmakers will help fund the school, but Chism said funding Oktibbeha’s consolidation sets a dangerous precedent for future school mergers.
“Once you come under the one system, we’re going to allow you to paddle your own boat. I think we’ve done as much as possible to make this palatable,” he said.
Chism previously said lawmakers could choose to give MSU the funding required for the construction, but that money would come out of its expected yearly contributions for capital improvements.
Another uncertainty is how the longstanding desegregation order from the Department of Justice will factor into consolidation.
Holloway said SSD filed a 700-page plan explaining the state-mandated merger but has not yet received a response.
“I expect they’ll send experts in to assess the districts and talk to the community. How long will it take? Well, it took Ackerman over a year, so I don’t have any expectation that it’ll be done by July 1,” he said.
Carl Smith covers Starkville and Oktibbeha County for The Dispatch. Follow him on Twitter @StarkDispatch
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