For the second straight year, county supervisors underfunded the Lowndes County School District’s ad valorem tax request due to an ongoing court battle over the issue.
On Wednesday, supervisors approved collecting $25,932,281 in ad valorem taxes for the school district in Fiscal Year 2022 — $2 million less than what the district requested — despite a chancery court ruling in August ordering the county to fully fund the request.
Supervisors’ president Trip Hairston said Chancery Judge Rodney Faver issued a stay for his order Friday until the county’s appeal to his decision was settled. LCSD’s attorneys asked the Mississippi Supreme Court to overrule the stay, but that request was denied.
The funding represents a 6.99-percent increase for LCSD’s operations and also provides for the first payment for a three-year, $3 million shortfall note the school district issued for Fiscal Year 2021.
It will increase the ad valorem tax rate for LCSD patrons by 5.11 mills to a total of 49.87, meaning property owners will pay an additional $51.10 in taxes for every $100,000 of assessed property value. Fully funding the request would have resulted in the tax rate jumping by more than 8 mills.
In August 2020, LCSD requested $27.4 million from ad valorem revenue — collected from real property, personal property and vehicle tags. The district argued it was entitled to add the value of expiring fee-in-lieu agreements, more than $3 million, to its request as new property.
A fee-in-lieu allows industries investing at least $60 million in the county to pay a fee equivalent to one-third of full ad valorem taxes for up to 10 years.
By law, a school district can increase its ad valorem request for operations by up to 4 percent each year without a possible referendum. Between 4 and 7 percent allows citizens to petition for a reverse referendum and more than 7 percent triggers a direct referendum. “New property” added to the tax rolls are exempt from being included in that percentage.
The county rejected LCSD’s request in 2020, arguing properties with a fee-in-lieu had already been assessed and could not count as new property. Therefore, supervisors argued, it was illegal for them to approve the requested operational increase since it was more than 7 percent.
LCSD sued the county in October 2020 and issued a shortfall note in June to cover the revenue supervisors denied to it. Faver issued a ruling Aug. 5 on the side of LCSD.
Sam Allison, LCSD superintendent, told The Dispatch on Wednesday the district’s attorneys had advised him stays of orders from ruling judges in cases like these are “pretty common.” He said the district plans to use the operational money it receives from ad valorem this fiscal year, but it will hold onto funds from the shortfall note until after a ruling on the county’s appeal.
Zack Plair is the managing editor for The Dispatch.