Lowndes County School District will use money from its fund balance to make up for a gap between expected local tax revenue and what the district is likely to receive.

Lowndes County Tax Assessor Greg Andrews told The Dispatch that LCSD crafted its budget with the expectation that a county mill — the value of which is based on the assessed value of personal and real property in the county — would be worth about $345,000. Last year, Andrews said, a mill was worth about $332,000.

However, he said the mill value this year dropped after reappraisal completed over the summer, and mills will be worth $318,000 each.

LCSD Business Officer Kenneth Hughes said the district’s budget included an expected $14.76 million in funding from local taxes. He said it was unclear as of Tuesday afternoon how much the district will have to withdraw from the fund balance, because he hasn’t received a final word from Andrews on what a mill value will be. Once he receives that, Hughes said, he will include it in his tax request so the district can use fund balance money to fill the gap.

Andrews, however, estimates the gap will be about $700,000.

LCD Superintendent Lynn Wright said the district was surprised to see the funding disparity, but will not raise the millage rate to make up for the difference.

“What we’re going to end up doing is drawing out of our reserves,” Wright said. “We’re going to make it. It was just a shock when we found out because we’d already set our budget for the year.

“We ended up with not what we anticipated,” Wright added. “Fortunately, we have some reserves that were built up for the case of an emergency.”

Hughes said LCSD has about $10.2 million in reserves.

LCSD approved a $97.5 million budget in early July. The budget includes $37.4 million in construction projects, in a continuation of a two-phase, $75 million construction project plan — which includes projects ranging from a new Caledonia Elementary School to parking lot expansion and resurfacing at West Lowndes Elementary School — the school board approved in 2013.

Voters approved $44 million in bonds for some of the projects in May 2015, and the remaining $31 million is coming from LCSD’s fund balance and lease-purchases.

Causes

Andrews said three of the four things that go into the value of a mill — real estate value, public utilities and motor vehicles — stayed fairly even from the 2015-16 fiscal year to 2016-17. However, he said the value of personal property dropped from $132.08 million in 2015-16 to $118.85 million for 2016-17.

“The reason personal property went down is depreciation on large, older industries,” he said.

Andrews said depreciation is based on a formula from the Mississippi Department of Revenue. He said it typically happens at about a 7-percent rate per year.

“The county has a Caledonia gas storage facility where they store natural gas,” Andrews said. “The natural gas price is down about 50 percent from last year. Also, the companies that are storing in that gas facility — their capacity is also down.”

Andrews further noted that at some industries, decreasing inventory led to lower assessed value. For example, at one Airbus property, a decrease in civilian equipment inventory reduced the assessed value from $20.37 million in 2015-16 to $13.66 million for 2016-17.

Wright said the situation isn’t ideal, but the district will “weather the storm.”

“We’re trying to be as effective and as efficient with the resources we have and are very grateful for the resources we have in Lowndes County,” he said. “Our situation, because of the industry that we have, we’ve been able to build up some reserves, so we’re very grateful for what we have in our county.”

Alex Holloway was formerly a reporter with The Dispatch.