The Lowndes County School District board on Friday approved a budget request of $30.5 million that will now go to the Lowndes County Board of Supervisors for approval.
Of the requested $30.5 million, $22.5 million is for LCSD’s operating budget, and $7.9 million will cover a combination of the district’s debt services and a new debt that covers a shortfall in last year’s school budget.
The request represents an approximately 2% increase over LCSD’s base request for operations last year. However it is a more than 7% increase from what the supervisors approved for LCSD’s operations funding for FY 2023.
By law school districts can request up to a 4% increase for operations from the previous year’s request. Up to 7% can trigger a reverse referendum, and more than that requires a direct referendum.
The district’s base operating budget request for FY 2023 was just short of $22.1 million, and supervisors allocated $20.6 million instead. Business Administrator Sayonia Garvin said she still needs to calculate payroll and transfers for items such as vocational and special education programs before knowing FY 2023’s final fund balance.
The proposed request for FY 2024 operations accounts for a $400,000 increase in new property added to the tax rolls, which does not count against the percentage increase.
It took 51.09 mills to cover LCSD’s FY 2023 total ad valorem funding. If the FY 2024 request is approved, based on the current mill value of $546,000 (the amount of taxes one mill generates), the tax rate would increase to 55.86.
A mill is used to measure property taxes. A 1-mill increase, for example, would add $10 to a property owner’s tax bill per every $100,000 of appraised value.
However, Tax Assessor/Collector Greg Andrews said the mill value is likely to rise, which could mitigate any increase in the tax rate. He is still trying to determine a mill value.
Superintendent Sam Allison is more optimistic.
“Based on the information given to us by the tax assessor, I do not foresee our request causing an increase in taxes,” Allison told The Dispatch.
The total budget request also accounts for a $1.1 million shortfall note from FY 2023. The district declared a shortfall of more than $2.1 million in FY 2022 and one of more than $3 million for FY 2021.
A shortfall is the difference between the amount of money the school district requested from the supervisors at the beginning of the fiscal year and the amount of money the supervisors actually approved the district to receive.
Since the district declared the shortfall prior to June 30, LCSD can borrow funds to make up for it and request special tax millage to repay the debt over three years. The supervisors have levied the special millage the last two years to cover LCSD’s declared shortfalls.
The lawsuit
But before the budget is funded, the board of supervisors will need to approve it by Sept. 15.
Over the last three years, the supervisors have denied the school district’s full request, claiming it exceeded the amount it could legally obtain.
LCSD sued the county in chancery court in 2020, claiming expired fee-in-lieu agreements — which added $50 million to the assessed value of property within LCSD boundaries — could be counted as new property since they had not previously been on the tax rolls.
The county can grant a fee-in-lieu to a business investing at least $60 million. The agreement allows the business to pay one-third of full taxes for up to 10 years.
Chancery Judge Rodney Faver ruled in LCSD’s favor in August 2021 and the county appealed to the Mississippi Supreme Court. In June, the court threw out the case because the district filed suit in the wrong court.
The supreme court did not address the “fee-in-lieu” issue, and LCSD has asked it to rehear the case.
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