An advertisement that appeared in The Dispatch each of the past two weeks has Trip Hairston ready to attend the upcoming Lowndes County School District board meeting.
Hairston, president for the Lowndes County Board of Supervisors, wants his fellow supervisors to come with him.
“Personally, I plan to attend because I want to make sure they (the school board) are properly representing what’s going on here,” Hairston told fellow supervisors at their Monday meeting.
The advertisement declared LCSD plans to request $28,006,216 in local ad valorem taxes — which includes operations and debt service — from the board of supervisors for the 2021-22 school year. LCSD’s board is set to approve requesting the funds at a special-call meeting at 5:30 p.m. Thursday.
County officials say the requested amount is roughly a 16-percent increase from the about $24 million the county collected for the school district last fiscal year. By law, Hairston said, LCSD can only increase its operational base for collections by 4 percent each year without triggering a possible referendum, and any such increase of more than 7 percent requires direct voter approval. Meanwhile, LCSD leaders claim the county shorted the schools more than $3 million last year.
New property
The issue, however, is more complicated than that, and both the county and LCSD await a decision from Lowndes County Chancery Court to determine which one of them is right.
If both parties agree on one thing, it’s that they hope the court decision comes through before supervisors are required to approve an ad valorem amount for LCSD on Aug. 16.
“The sooner, the better, definitely,” LCSD Superintendent Sam Allison told The Dispatch last week.
Each year, LCSD requests local ad valorem taxes that are collected from real and personal property owners. It can request an up to 4-percent increase from local sources for operations, plus “new property” — new assessed value added to the tax rolls over the previous year. The supervisors approve the request and set a millage amount that will raise enough to cover it.
Last year, LCSD requested $21.1 million for operations ($27.4 million total), and it claimed more than $50 million worth of expiring fees-in-lieu as “new property.”
A fee-in-lieu allows industries investing at least $60 million to pay a fee that amounts to one-third of their full taxes for up to 10 years. LCSD argues that once those agreements expire and the business is on the tax rolls, it’s “new.” The county argues those properties were assessed in the beginning when the fee was determined, and so they cannot be added to the district’s tax base as “new” when the fees roll off.
Supervisors rejected last year’s request and instead provided only $17.9 million for operations ($24 million total). That lowered the millage rate for LCSD from 46.71 to 44.76.
In June, LCSD declared a shortfall of about $3 million to allow it to continue claiming its full ask as its base while the issue is hashed out in court. It also would allow the district to borrow the shortfall and designate mills to pay it off over three years.
Hairston said supervisors, even without a court decision, are likely to reject the district’s new request and instead use last year’s actual collections as the “base.”
“I think they should have to put an asterisk beside the number they are advertising as their base from last year,” Hairston told The Dispatch last week. “I think the supervisors are all on the same page that $24 million was sufficient and (the school district) doesn’t have to have $28 million.”
A mill is used to measure property taxes and each mill amounts to $10 in taxes for every $100,000 in assessed property value. County Tax Assessor/Collector Greg Andrews told supervisors Monday if LCSD gets its $28 million request for this year, it would raise taxes by 9.48 mills. That’s $94.80 in new taxes per $100,000 of assessed property value. It would mean $1 million more in taxes for Steel Dynamics and $300,000-plus more for companies like International Paper and Paccar.
District needs
LCSD had nearly depleted its operating reserves by the end of 2019 when Allison was hired as superintendent. Over the next 18 months, the district built back its general fund balance back to about $11 million.
“That sounds like a lot, and it is,” Allison told The Dispatch this morning. “We have buildings in need of maintenance and projects that need to be done we don’t have the funds for.”
Allison stands by the district’s position with the county, saying this year’s ask for operations is only about $200,000 (or 1 percent) higher than what the district should have been allowed to claim for its base last year.
He previously told The Dispatch he thinks the county’s argument circumvents the law, and he believes the district will win the suit. This morning, he said the main issue — regardless of what’s in LCSD’s fund balance — is that claiming fee-in-lieu as new property is the only way the school district can reap the benefits from those agreements expiring. The county can set millage, so that added value is “absorbed” into its collections, he said. Since school districts can only request funds — and those funds cannot exceed a 4-percent increase in operations without triggering a potential referendum — fees-in-lieu rolling off only serves to lower the school millage rate, while the county continues to benefit fully.
“The main issue here is if this is new property, and we believe it is,” Allison said.
If it does, board of supervisors’ attorney Tim Hudson said county taxpayers may be on the hook for repaying LCSD’s shortfall note. If the county prevails, LCSD will have to settle for receiving a smaller amount in local taxes.
Whatever the chancery court decision, both county and school officials said the suit would be appealed.
“If either side isn’t satisfied with the ruling, who’s to say it wouldn’t go to the next level?,” Allison said.
Zack Plair is the managing editor for The Dispatch.
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Quality, in-depth journalism is essential to a healthy community. The Dispatch brings you the most complete reporting and insightful commentary in the Golden Triangle, but we need your help to continue our efforts. In the past week, our reporters have posted 32 articles to cdispatch.com. Please consider subscribing to our website for only $2.30 per week to help support local journalism and our community.
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