Lowndes County Board of Supervisors may seek legal opinions on whether it can refuse to fund a shortfall note approved by the Lowndes County School Board last week, according to President Trip Hairston.
“I think we’re probably going to seek some legal opinion on what we need to do when it comes to the shortfall,” Hairston told The Dispatch after a Monday morning supervisors’ meeting. “I think based on what the (Mississippi Supreme Court) did we are probably within our rights to (refuse the shortfall). … I’m not sure if it’s the right thing to do now or not.”
Thursday, during a special-call meeting, the LCSD board declared a $1.1 million shortfall in its operating budget for Fiscal Year 2023, which ended June 30.
The district declared a more than $2.1 million shortfall in FY 2022 and one of more than $3 million in FY 2021. Declaring a shortfall allows the district to borrow that money and request a special millage be levied to service the debt. Over the past two years, supervisors have approved the special taxes to cover the shortfall.
A shortfall is the difference between the amount of money the district requested from the supervisors in ad valorem taxes at the beginning of the fiscal year and what the supervisors actually approved for the district to receive. It does not mean there is a deficit in the district’s general fund.
The district’s fund balance at the end of FY 2022 was about $19.9 million.
That fund balance is part of the problem from the supervisors’ point of view, Hairston said.
“They reported that they had $19.9 million in the bank they are sitting on,” Hairston said. “Then they claim this shortfall. That doesn’t make a whole lot of sense to the board of supervisors.”
The supervisors have denied the school district’s full tax request in each of the last three years, claiming it exceeded the amount the district could legally ask for. LCSD sued the county in chancery court in 2020, claiming fee-in-lieu agreements — which added $50 million to the assessed value of property in the district’s 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 making a capital investment of at least $60 million. The agreement allows the business to pay a fee equal to one-third of its ad valorem taxes for up to 10 years. Since the business has to be assessed in order to determine the fee, the county argues it is not new to the tax rolls once the agreement expires.
The issue of what is and is not new property is at the center of the struggle between the district and the county, because by law the district can request an increase of up to 4% in ad valorem collections each year for operations. An increase of between 4% and 7% triggers a potential reverse referendum, meaning citizens can sign a petition to get the tax hike on the ballot. More than 7% triggers a direct referendum.
The law exempts new property — property on the tax rolls for the first time — from that equation.
While Chancery Judge Rodney Faver ruled in LCSD’s favor on the new property question in August 2021, the county appealed to the Mississippi Supreme Court, which threw out the case last month because the lawsuit should have been filed in circuit, not chancery, court.
That means the question of what is or is not new property was not resolved.
“The board of supervisors remains resolute that you can’t (include fees-in-lieu as new property),” Hairston said. “The district is pretty resolute that you can. The question is still open, and as we approach the budget season it’s one the supervisors and the district are going to be looking at pretty closely.”
LCSD Superintendent Sam Allison and Board Attorney Jeff Smith both declined to comment when contacted by The Dispatch on Monday morning.
Community center paving
At Monday’s meeting, supervisors unanimously approved a $136,480 total bid by Falcon Contracting to pave the parking lots at the Concord, Crawford and New Hope community centers.
The Road Department will “set up” the lots, which are currently gravel, for paving by removing the gravel and the markers at each parking place, said Road Manager Mike Aldridge.
Bidding out the work will be both cheaper and easier than doing it in-house, he told the supervisors.
Interim Recreation Director Tom Velek said he wanted to give about 48 hours notice to citizens before work gets underway, as the parking lots will be unusable.
Aldridge said he wasn’t sure when Falcon would start work, but he thought it would be soon.
Brian Jones is the local government reporter for Columbus and Lowndes County.
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