Columbus Municipal School District Superintendent Philip Hickman says he’ll recommend withdrawing from the district’s reserve funds to avoid a tax increase for the coming fiscal year.
But a tax increase in the near future still looms.
Hickman, along with CMSD Business Administrator Tammie Holmes and Lowndes County Tax Assessor Greg Andrews spoke at a Thursday morning information session jointly organized by the Columbus Lowndes Chamber of Commerce and the Golden Triangle Development LINK.
The move to draw from the district’s reserve funds comes amid a wave of public pressure after it emerged that the district might need 6.1 additional mills to pay for a budget that’s roughly $1 million higher than last year’s.
At Thursday’s session, Hickman said the district could draw from its roughly $4.25 million reserves to get through Fiscal Year 2017’s budget without a tax hike.
“That’s what I will propose to the board,” Hickman said.
Much of the increase in CMSD’s budget comes from old debts. Holmes said CMSD is dealing with $34 million in debt incurred from largely voter-approved bond issuances from 2004 to 2010.
For FY 2017, CMSD needs $2.5 million to meet its debt obligations.
Drawing on reserves will get the district through FY 2017 without a tax hike, but Holmes said the debt obligations for FY 2018 will grow to $2.7 million.
“We’re not going to be able to go into our fund balance again to mitigate the pain,” she said. “So we’re preparing you now to expect possibly a $1.4 million increase in taxes to cover our debt obligation that the people voted for.”
Andrews, likewise, said the measure is a temporary fix, and higher taxes are likely on the horizon.
“We may not have a 6.1 mill increase tomorrow, but we’re probably going to have a 6.1 mill increase in the future,” he said.
After a Thursday evening public hearing on CMSD’s proposed budget, Hickman said this year’s measure is only a Band-Aid on a problem that won’t go away. Next year, he said, the district will have to face it.
“The same thing that Mr. Joe Higgins said, the same thing that Greg Andrews said — we cannot run from it,” Hickman said. “That was debt — $22 million that people approved. That was a loan that has to be paid. Whether we put a temporary fix on it now, we’re going to have this same conversation next year except we’re not going to have money to do that temporary fix.”
Andrews also noted that CMSD’s estimations are based on an estimated value of $204,000 per mill. If the mill value comes in higher or lower, it will affect how much the district has to draw from its reserves. Andrews is required to provide a final mill value by July 15, but said at the meeting he hoped to have one by Thursday afternoon.
Holmes said CMSD needed $10.6 million, or 51.07 mills, for operations in FY 2016. The district needed an additional $1.9 million for debt, or 9.5 mills. She said CMSD had a budget request last year for about $12.5 million, or 60.57.
With the request, Holmes said, CMSD released 4.2 mills, worth $869,400. She said that should have amounted to $42 in savings per $100,000 in assessed value on a residential property, but citizens only saw $20 in tax savings.
For businesses, Holmes said the 4.2 mills should have led to a $67.50 savings for every $100,000 in value. But, she said, businesses only saw $37.50 in tax savings.
In September, the city council set school millage at 61.39 mills for FY 2016. The rate was 4.46 mills lower than FY 2015’s 65.85 millage rate. However, the city’s millage rate rose slightly to 43.69 mills from the previous year’s 41.23 mills.
Hickman pointed at the city for the difference, saying that CMSD can only request millage rates.
“We asked for 4.2 mills less. We gave it back to the city. We don’t raise or lower taxes. The city does. Did anybody get a lower increase than 4.2 mills? Our job is to do a request. The city’s job is to make the adjustment.”
Holmes echoed Hickman’s sentiments, saying taxpayers should pose the question to the city, rather than CMSD.
“What the city did with the rest of that money, we don’t know,” Holmes said. “That’s a question you as a taxpayer have the right to ask. But we gave up $42 worth of taxes last year to every homeowner who was at $100,000 in this example.”
Budget details
CMSD’s proposed budget, as of Thursday, includes $41.9 million in total revenues. The bulk of the district’s funding — 48 percent — is projected to come from the state. Local funding is projected to account for 30 percent of revenues, and federal funds are expected to account for 22 percent.
The district’s revenues are down from 44.6 million last year. Holmes said the lost funding is driven primarily by state-level funding cuts, including a more than $1 million reduction in Mississippi Adequate Education Program (MAEP) funds.
CMSD’s proposed FY 2017 expenditures are $42.86 million.
Instructional services account the most spending, at 49 percent of projected expenses. Support services account for 36 percent of projected expenditures; non-instructional services account for eight percent; and debt service counts for seven percent.
Alex Holloway was formerly a reporter with The Dispatch.
You can help your community
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.