The Columbus Municipal School District may seek as much as a nine mill increase in its tax levy.
[For a different perspective on the CMSD’s financial issues, see related story in this issue by Sarah Fowler. – Brian Jones] The CMSD held its budget hearing July 19, and Business Manager Ken Hughes, following questions from the public, estimated that the tax levy could increase by as much as nine mills to cover debt service and decreasing income from the state and federal level.
However, he said that the board is still working to find cuts and to reduce spending and no final decisions have been made.
That much of a tax increase would have to be approved by a public referendum.
About 20 people attended the meeting, and several asked increasingly pointed questions as the hearing went on. [This was a huge crowd compared to the usual hearings – there are usually less than 10 people in attendance, and most of those are members of the media and district employees. – Brian Jones]
Business Manager Ken Hughes made the presentation, running through a broad overview of the proposed budget.
“We’re projecting an enrollment of 4,500 students next year,” Hughes said. “That will take a staff of 615 employees, giving us approximately a 19:1 ratio of students to teachers.”
The proposed budget includes $43,510,233 in revenues, down from the FY10-11 amount of $44,450,224.
“The revenues are broken down into state, local and federal areas,” Hughes said. “We are projecting local revenue at $15,280,243. State revenue is $19,769,154, and federal revenue is $8,451,337. State sources make up nearly half of our revenue, local sources are approximately one-third and federal sources make up the rest.
“When we look at local revenue, we are projecting ad valorem taxes at $14,325,506,” Hughes said. “This would be the ad valorem effort to meet the district’s needs in operations and debt service. We also food service sales and various other local revenues.” [Food service brings in $296,338 and “other local revenues” bring in $658,399. The FY12 budget is anticipating $542,675 more ad valorem tax dollars than FY11, but $45,413 less in food service sales and $197,990 less in “other” revenues. – Brian Jones]
The district is projecting $19,769,154 in state revenue.
“Our state revenue is made up of Mississippi’s Adequate Education Program,” Hughes said. “You can see the amount increased from the prior year by about $1.5 million. But you’ll see when we look at literal dollars the federal revenues dropped a good bit more than that. The state used the American Reinvestment and Recovery Act money – the federal stimulus dollars – to fund the year that we just finished. That money has gone away for the most part. We have lost right at $2 million in federal funds that came through the state. It looks like an increase there, but when we get to federal revenue you’ll see that it’s not so. [The MAEP amount for FY12 is $18,585,781. – Brian Jones] “The Educational Enhancement Funds, that’s the one-cent sales tax, we saw a decrease of about $30,000 from the prior year,” he said. [This year the district is receiving $242,772. – Brian Jones] “We also have the school ad valorem tax reduction funds, which are also a product of the one-cent sales tax increase back in 1990. You can see we’re getting $18,464 this year. Last year it was $72,936. The prior year it was approximately $345,000. When the state legislature took that money out of the education pot, in essence what they have done is shift that back to the local taxpayers. Over a two-year period we went from $345,000 to just a little over $18,000. The homestead exemption is $345,000, which is the same as it was last year. Vocational education is also very very close to what it was last year, at $337,000.”
CMSD is receiving $8,451,337 in federal revenue, down from $11,307,374 in FY11.
“If you look at the MEAP stabilization, that’s the money the state took from the federal government to fund our adequate education program,” Hughes said. “We’ve got $1,114,503 that will not be there in FY12.”
Item by item, the federal revenues are:
•Child nutrition: $2,600,469, a decrease of $49,537.
•Title I: $2,447,622, a decrease of $231,710.
•Title II: $467,287, a decrease of $40,308.
•IDEA: $1,102,142, a decrease of $266,754.
•AARA MAEP Stabilization: 0, a decrease of $1,114,503.
•AARA Title I: $306,501, a decrease of $1,054,523.
•AARA IDEA: $23,061, a decrease of $235,292.
•AARA Education Jobs: $151,316, a decrease of $529,610.
•Advanced Placement Grant: $444,529, an increase of $435,071.
•Other Federal Revenues: $908,411, a decrease of $231,127.
The FY12 budget is projecting a total of $43,185,171, down from $51,875,388.
“Instructional is our largest part,” he said. “That’s budgeted at $22,442,544. [FY11 was $22,620,107. – Brian Jones] Support services, which includes counselors, librarians, your school principals, central office, maintenance and transportation, is $13,955,785. [FY11 was $14,072,124. – Brian Jones] Non-instructional services is, for the most part, food service, and is $2,428,976. [FY11 was 2,506,316. – Brian Jones] Then we’ve got debt service, which is $4,357,867.” [FY11 was $3,958,188. – Brian Jones] The instructional budget is divided between elementary, middle, secondary, gifted, special education, alternative and vocational. Area by area, expenditures are:
Elementary: $9,509,624. This includes the preK through fifth-grade magnet schools; there are 2,350 students, 153 teachers, and 54 paraprofessionals.
Middle: $3,453,603. This covers grades 6-8, serving 950 students. There are 49 certified staff and three paraprofessionals.
Secondary: $4,266,604. This area serves 1,250 students in grades 9-12, including 120 Carnegie Units, the technology center, and 60 certified staff.
Gifted: $277,765. Gifted programs serve 160 students in second through eighth grade. It is required by the state department of education.
Special Education: $3,418,851. SPED services are offered in all buildings; there are 53 certified staff and 24 paraprofessionals.
Alternative Education: $337,721. The alternative school serves 85 students in grades K-12. There are six certified staff and one paraprofessional. The program serves both CMSD and Lowndes County School District students.
Vocational: $1,178,376. The district offers 10 career education programs, serving 400 students. There are 21 certified staff.
The total debt service amount is $4,357,867.
“This is a very brief summary of our debt service payments,” Hughes said. “The debt service payments that we will have next year is general obligation bonds principal and interest. That’s what the taxpayers approved when we issued bonds to build the new middle school, and we still have some from the last issue in 1994, when they issued about $17 million worth then. We’ve got three years left on some of those. We’ve also got some shortfall notes that we’re paying on, and we also have a three-mill note where we borrowed money to rebuild Stokes-Beard when it was destroyed four or five years ago.”
The total debt service principal amount in the FY12 budget is $3,341,045, with $998,822 in interest and $18,000 in fees.
The district is projecting a $3.5 million fund balance at the end of FY11 and a $2.7 million fund balance at the end of FY12, a substantial drop from $11.4 million in FY07.
“The fund balance is what a businessman would call retained earnings, or some of you may call it a rainy day fund,” Hughes said. “You can see that in 2006 we were at just under $10 million. It increased next year to $11,407,410, and then it decreased to $11,387,531. In 2009, we had $10,200,102. The next year it was $5,524,748. We are projecting…we are not completely through with the budget for the fiscal year ending June 30, 2011, but we are projecting to end with about $3.5 million.
“The question you’ll ask is where did all that money go?” Hughes said. “Some of the highlights of that was that we added on to three elementary schools. When we approved the bond issue for the new middle school, we said we would add fifth grade to the elementary schools. It was necessary to build classrooms at Joe Cook, Stokes-Beard and Sale to accommodate those students. Those projects cost about $5 million. In the fiscal year that ended June 30, 2010, we applied for and received a grant through ARRA money to purchase 30 new school buses. We got the grant for $1.7 million, but we had to match 50%. It was a good thing, we got clean and safe buses, and that’s something we’re proud of.”
Hughes gave an overview of the district’s historical millage.
“The district’s operational millage has been steady at 48.55 mills for the past three years running,” Hughes said. “For the fiscal year ending June 30, 2007, our debt service mills were at 11. Currently we are at approximately 14.2. For the past three years running our total millage rate has been 62.97 mills.” [The city of Columbus’s millage rate is 37 mills. – Brian Jones]
Hughes then opened the floor for questions.
Rev. James Samuel was very critical of the district’s plan to raise taxes.
“I’m bewildered and put to sleep by all your numbers,” Samuel said.
“I’m sorry,” Hughes said.
“I’m sure you’re in charge of your environment and know what you’re doing, but most of us have no idea what that is you just gave us,” Samuel said. “What you just gave us is a package that was put together for corporate consumption. The bottom line is that you’re about to raise our taxes. I’m bothered not only by that, but I think a lot of the things that you talked about…you talked about the middle school, and how the city came together and voted to pass this. Eighty percent of the city was not even informed, they were just told what to do. This was somebody else’s dream.
“Now the city is looking at annexing some of the county, which may cost us more money in a legal battle with people who don’t want to pay city taxes,” Samuel said. “You people, with all due respect to you doing your job, have created a total mess and you’re out of control. Some of these people can’t afford a rate increase on their taxes. I’m not trying to be mean, I’m not trying to pick on you. I think there’s something wrong. I think you people see us as a bottomless pit of sheep, and anytime you need a lamb chop you just pull one off and cut it out.
“Some of us are not cool with that,” Samuel said. “Some of us are having trouble paying $2.80 for a loaf of bread, and some of us are finding it hard to pay $3.56 for a gallon of gas. You didn’t make those products, but we have limited revenues and you’re now telling us we have to give you more of it. I just have a problem with that.”
“At this point the board is looking at all of our needs,” Hughes said. “Eighty-four percent of the taxpayers voted to approve a $21 million bond issue. [It’s true that 84% of the votes cast for the bond issue were in favor, but voter turnout for that particular election was very low. – Brian Jones] We told the taxpayers at that time that we could do this with no more than a three-mill increase on our general obligation debt. Currently, that’s not happening. This district cannot continue to pay back $21 million when 84% of the population said we want this, it’s good for our community, tax me. We can’t pay for it out of operations. We’ve been paying for part of it out of operations, but you see in those figures where the fund balance takes a nose dive? That’s part of that also.”
“How much of a millage increase are we talking about?” asked Greg Lewis. “Two mills, three mills, four mills?”
“Let me be real clear on that,” Hughes said. “We do not set the millage rate. We request tax dollars. [Tax Assessor/Collector Greg Andrews determines the value of a mill. The city sets the millage rate. – Brian Jones] We know what our needs are. As far as how deep the board wants to continue to dig into our reserves, that has not been decided upon as far as I know.”
“You’re the accountant, you do the numbers, and they have not disclosed that to you?” Samuel asked.
“They’ve not decided,” Hughes said. “It’s not that they haven’t disclosed it to me. They have not decided.”
“Under the proposed budget, what would it be?” asked Berry Hinds.
“If we were to take everything that this district needed, it would be about a nine mill increase,” Hughes said. “Let me repeat what I said. The district has not decided how far they intend to dip into fund balance. It’s just a matter of how much.”
“You said three mills when you were building the school,” Samuel said. “Now you’re telling us it’s going to be triple that?” “No, that’s not what I’m saying,” Hughes said. “That’s to fund everything in this budget. We’ve had shortfalls for at least the last couple of years. We’ve got existing debt also. The assessed valuation is going down. When the valuation goes down and the dollar amount for the payments remain the same, the millage rate is going to go up.”
[The value of a mill is anticipated to drop from $208,000 to $205,000 on Oct. 1. – Brian Jones] “What are you going to do with Hunt School?” asked an audience member.
“I’d have to defer that to the school board,” Hughes said.
“The building right now is being used for planning for the upcoming school year,” said Interim Superintendent Martha Liddell. “It’s going to be used for alternative services and special education.”
“Are you also supporting the people who are using it outside the school system?” Hinds asked. “Are they paying for the utilities they use and that stuff?”
“The school district is paying the utilities,” Liddell said.
[The district recently spent $527,000 on renovations to the Hunt campus. The work, which was funded out of the general fund, included repairs and replacement of heating and air condition units to make them more energy efficient, repair of collapsed sewer lines, water leaks and exhaust fans, and installation of a new handicapped ramp. Rooms were painted, floors repaired, a security system was installed, windows were repaired and replaced, doorways were installed in hallways for energy efficiency, and the kitchen area was remodeled. Fire protection systems were upgraded, and timers were place on lights. – Brian Jones] The board has hired an efficiency expert to help them with the budget process; the expert is being paid $125 per hour. According to Hughes, she has been helping the district since June.