A higher than expected mill value will slightly mitigate Columbus Municipal School District budget concerns for next fiscal year, school officials said Wednesday.
Lowndes County Tax Assessor Greg Andrews this week calculated the school district’s mill value at $206,000, down $1,000 from last year and leaving a roughly $1 million gap from increased debt service obligations in CMSD’s projected 2016-17 budget. Originally, Andrews estimated the mill value would be $204,000, which would have placed the budget shortfall at about $1.2 million.
CMSD plans to dip into its reserve fund to cover the shortfall. CMSD’s reserves have between $4 million and $5 million, according to district business administrator Tammie Holmes.
Superintendent Phillip Hickman told the Dispatch Wednesday that the mill value coming in higher than expected is a “very positive” development for the district.
“The main thing is that we’re able to provide kids with a quality education that they deserve,” Hickman said. “In order to provide children with an education, there’s a cost to it. Education is not free. What that allows us to do is put more resources in our teachers’ hands. That will benefit kids.”
Andrews said the district wants to keep the property tax rate at 61.39 mills for the coming year. He said the CMSD is requesting $11.12 million for operations, which would require 53.99 mills to fund. The district has $2.64 million in debt obligations, which requires another 12.84 mills, he added.
He said the district’s budget can accommodate 7.91 of the mills needed for debt obligation, and the remaining 4.93 mills — or roughly $1 million — will have to come from the reserve fund.
CMSD will draw from its funds rather than raising millage after a report on a potential tax hike sparked a wave of public resistance. The district’s initial budget would have required a 7.35-mill tax raise to account for a $1.4 million difference from last year’s budget. That was later revised to $1 million, or 6.1 mills.
However, a tax raise may still loom for fiscal year 2017-18, because CMSD likely will not be able to dip into its fund balance again. The Mississippi Department recommends districts to keep 7 percent of its annual budget in reserves. In CMSD’s case, that is roughly $1.7 million, according to board member Jason Spears.
“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,” Hickman said at a meeting last week.
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 bonds from 2004 to 2010. The bonds were used on several school construction or improvement projects.
At a meeting last week, Holmes said the district is considering options to reduce debt payments, such as restructuring debt. She said the district will likely have to deal with more debt obligations for next year, with debt obligations rising to about $2.7 million.
On Wednesday, Spears and board president Angela Verdell said the news represented a step in the right direction for the school district. Verdell, like Hickman, said the news is “very positive” as the district continues working through its budget process.
Spears said CMSD will have to continue working to reform spending and long-term obligations to reduce the amount of money it must dedicate to paying off debt in the future.
The school board will meet on Friday to discuss the budget.
Alex Holloway was formerly a reporter with The Dispatch.
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