The Lowndes County School District is expected to pass a budget Friday that will mean a tax hike for residents if approved by the board of supervisors.
At a special-called public budget hearing, LCSD school business administrator Sayonia Garvin recommended a proposed budget for Fiscal Year 2023.
The budget does not include an increase in a higher operating base for the district from FY 2022, but it does include a new programs request, ad valorem request for debt services and ad valorem tax requests for last fiscal year’s $2.1 million shortfall note, Garvin said.
The district’s base operating budget for FY22, which ended June 30, was a little more than $21.3 million after ad valorem taxes, homestead reimbursement and ad valorem tax shortfall notes. The proposed request for FY23 has the same $21.3 base, but the district is requesting $759,349 in new programs. This will bring the district’s net ad valorem tax request for operations to just more than $22 million.
The district’s proposed budget request adds up when it comes to debt services and covering the past two fiscal years’ shortfall notes, which together adds more than $7.3 million onto the total proposed request of $29.4 million.
“Our debt is last year’s shortfall plus this year’s payment, which (the supervisors) cost the taxpayers money because they didn’t give it to us,” Garvin told The Dispatch.
Each year, county supervisors approve LCSD’s ad valorem tax allotment, collected from property owners based on their property’s assessed value. The district asks for a certain amount of money, and the county sets the number of mills, or the tax rate, necessary to collect it.
The district requested roughly $28 million total from ad valorem tax collection for last fiscal year — which includes operations and debt service — but the county approved just less than $26 million. The proposed request for FY23 is roughly $1.5 million more than the previous year’s request.
For last fiscal year, LCSD had 37.19 mills designated for its operating budget, and each mill is worth $520,000. If the millage rate stays the same, the total number of mills designated for LCSD’s proposed operating budget would equate to 42.48 mills.
Lawsuit overview
By law, the district is allowed to request an increase of up to 4 percent from the previous year’s fund request for operations. An increase of more than 4 and up to 7 percent requires a potential reverse referendum, meaning citizens can sign a petition to get the tax hike on the ballot. More than 7 percent requires a direct referendum.
In 2020, LCSD sued the supervisors for not fully funding its tax request by more than $3.4 million in property tax revenue. LCSD had claimed roughly $50 million in added assessed value in its tax collection area as “new property,” which can be counted before the 4-percent increase for operations is added to the funding request.
The “new property” LCSD claims comes from fee-in-lieu agreements that have expired. Those agreements allow industries that invest more than $60 million to pay one-third of what their assessed value of taxes would be for up to 10 years. For 2020-21, multiple fees-in-lieu reached their expiration date, and the school district claimed it was entitled to the full collections as new property since it had never been on the tax rolls.
Chancery Court Judge Rodney Faver ruled with the school district in August, saying LCSD could acquire the taxes from expiring fee-in-lieu agreements as new property — meaning it did not count against its 4-percent increase — because those properties had never been on the tax rolls. However, supervisors have appealed the ruling, and a decision is not likely before next year.
Superintendent Sam Allison said the increase in the debt costs the taxpayers money.
“It’s costing taxpayers money when (the supervisors) short us every year because we’re having to claim that as a shortfall,” Allison said. “We won the case. Judge Faver was clear, and not only Judge Faver but every other district that has (fee in lieu) in the state that I’ve talked to, has said it’s new property.”
School board member Brian Clark said the investment in the schools is worth it.
“It’s a big number, but when you look at how big our district is and our campuses, why don’t we want to invest money in our future?” Clark said.
The LCSD board is slated to vote on the budget Friday at their regular monthly meeting at 12:30 p.m. at the LCSD Central Office.
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