Schools count on local tax
Published 5:23 pm Friday, December 19, 2008
A prorated school budget by at least nine percent is going to hurt the Butler County School System and Superintendent Mike Looney said if there is any time to shop locally, it is now.
“We really need to – and honestly we have got to – hammer home that we have to commit to shopping locally,” said Looney.
Looney said the county has been fortunate in that local sales tax receipts have not declined even with the economic pressures consumers are feeling on the state and national level.
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“The news specific to Greenville and Butler County is not bad at all,” he said. “We’re going against the state and national trend in Greenville.”
Looney said that trend must continue.
“Here’s the danger and I’ll use the new construction that’s happening across the county as an example, which is funded by local sales tax,” explained Looney. “The state has declared proration and cut us by nine percent, but at the same time, if local sales tax receipts drop we’re faced with a double-edged sword. Our annual payment is about $2 million on the new construction. Let’s just say we only collect $1.5 million. That means the board must come up with the other $500,000.”
The Board of Education borrowed approximately $25 million for new construction and renovations to schools across the county. That construction is funded through a one-cent sales tax increase in Georgiana and McKenzie, as well as a half-cent sales tax increase in Butler County.
The payment on that loan was calculated based on average sales tax collections, said Looney.
“It’s not a flexible mortgage payment,” said Looney. “So if we fall short on sales tax receipts, we have to make it up somewhere else.”
Looney estimated on Tuesday the school system would lose approximately $1.8 million in state funding due to Gov. Bob Riley’s declaring 12.5 percent proration. Proration was reduced to nine percent because Gov. Riley immediately withdrew $218 million from the state’s Rainy Day Fund.
The second half of the Rainy Day Fund will be distributed during the remainder of the fiscal year.
“Doing this allows us to responsibly manage the disbursement of the Rainy Day Fund and also meet the needs of our schools,” said Riley.