Schools relieved at 'minor' dip in property tax digests

“We were delighted,” reported Jeff Sanchez, the system’s finance director. “We’d heard rumblings a couple of weeks before that it was going to be around five percent, which gave us some ray of hope. This wasn’t a bad one. We’d been working on reducing staff and expenditures, so we were prepared for this. Our fund balance is in pretty good shape.”

Other factors are also hitting school system revenue. American Relief and Recovery Act (ARRA) grant money is gone, as is the money from the education jobs program. Altogether, said Sanchez, the school system expects $2,245,000 fewer dollars than it had to spend last year.

The dip in property tax income comes from falling values of housing. The commercial and industrial portions of the county tax digest actually went up a little. What’s worse is that the housing digest is widely expected to continue to decline next year as foreclosures continue to glut the market.

To make it through the current fiscal year, Sanchez said the system plans to dip into its fund reserves to the tune of about $1.9 million. Assuming no other major hits to the budget, that would leave the system with approximately $2.5 million in reserves next June 30.

That, in turn, is based on the system retaining 10 furlough days. Because the tax digest was not down as much as originally feared, there is some talk of reducing the number of furlough days, which save the system about $267,000 apiece.

“We will discuss that at the next budget meeting,” Sanchez said.

In Commerce, the change in the tax digest is minimal, reports James E. “Mac” McCoy, superintendent.

“It appears that we are right where we were last year,” he said. “We might have taken a small dip. We’re still waiting for the final valuation to come in, but I’m not panicking right now.”
The commercial part of the tax digest went up, offsetting some decline in the residential digest, McCoy said.

“We went up in one area and came down in another,” he concluded. “Overall, it stayed flat.”

But, like Jackson County, the Commerce School System must cope with other revenue reductions of about $1 million.

“We continue to cut the budget and not hire positions we don’t have to have to make ends meet one more time,” McCoy said. “Overall, we’re looking at a little over $1 million. We picked up a lot of that by not replacing personnel.”

McCoy said the Commerce system has about $1.09 million in reserves, and he anticipates needing to use some of that money before June 30, 2012.

It could be worse, he points out.

“I talk to friends in other systems. We’re not in as bad shape as some folks, but we’re certainly not where we were three years ago,” he said. “This is draining everybody’s reserves.”