Schools expect to borrow money in Feb. due to late taxes

Madison County schools superintendent Dr. Mitch McGhee told the board of education (BOE) that he’ll recommended next month that it take out a Tax Anticipatory Notice (TAN) to borrow the funds needed to operate schools until tax revenue comes in.

“There’s nothing for y’all to approve right now,” McGhee told the school board Tuesday night. “But I wanted to keep y’all up (to date) with where we are right now.”

Late county tax notices have held up school tax collections, McGhee said, and without that revenue, the school system can only operate on its reserves until Feb, 20.

“As it stands now, we will run out of money at the end of February,” he said.

The school system will seek bids from banks for the TAN. Madison County will pay back the loan with the tax revenue, plus interest.

“We’ll have to pay some interest,” McGhee said. “That’s the down side to that.”

The superintendent said tax collections could start rolling in by April or May.

“We’ll have to float the TAN for two or three months until the tax money starts coming in,” McGhee said.