BOE prepared to dip into fund balance to avoid millage rate hike
The Madison County Board of Education (BOE) passed its proposed $40.1 million budget Monday amongst speculation the county property tax digest will decrease.
Though the county digest is projected to dip by roughly $30 million, the Madison County school board expects not to have to raise its millage rate when it sets that rate later this year. Superintendent Dr. Mitch McGhee said the system could apply up to $420,000 from its reserves — if needed — to avoid raising the rate, should the digest decrease.
“For a year, we can hold steady and go into our fund balance,” he said.
But McGhee said this would be a “one-year shot.”
“If it continues to decrease, we’ll have to raise the millage rate,” McGhee said. “If it bounces back, then we’ll plan for that growth next year.”
The $420,000 figure is a worst-case scenario, McGhee said.
The superintendent says it is more likely that the school system would have to dip into less than $100,000 in reserves.
The school board will revisit the issue after the tax digest is released.
“Not only will we have the digest, we’ll have a lot better handle on some of our budgeted items that we may have gotten some savings on there,” McGhee said.
The superintendent said the whole process is “iffy” right now because school leaders simply don’t have the tax digest numbers yet.
If a drop in the digest required much more than $420,000 out of reserves, the Madison County School System couldn’t hold the millage rate. But McGhee is still holding out hope that school leaders might be able to lower the millage rate a little this year if the digest figures don’t drop as much as anticipated.
“If the digest ends up being not that bad, not that much decrease, we hope to be able to even drop the millage rate a little bit,” he said.
The BOE faces a unique situation each year, not knowing the tax digest figures when it plans the budget.
“We kind of have to shoot in the dark a little bit,” McGhee said.
In planning for the 2008-2009 expenses, school leaders had anticipated a four percent growth in the tax digest — which McGhee considered conservative — before hearing the speculation that it would slip.
BOARD ANSWERS BUDGET QUESTIONS
Two Madison County taxpayers attended the public hearing preceding the budget vote, one of which said he’s being priced out of ownership of his land with the cost of schools increasing property taxes.
Sixty-eight percent of property taxes go toward funding the school system.
This year’s school expenditures — $40,102,042 — are up $1,911,807. Nearly $11.8 million of that $40 million will come from local sources.
Superintendent Dr. Mitch McGhee noted that state leaders continue to slash money from an outdated funding formula for schools. Meanwhile, the school systems have to cope with the rising costs of operating schools, hiring more teachers to accommodate smaller classroom size requirements and employing more personnel for state-required bookkeeping and reporting.
Some positions aren’t funded by the state, which is requiring a two percent raise in salaries this year. Local systems are left to fund those raises and increases in benefits. Eighty-eight percent of the Madison County school system budget is tied to personnel.
McGhee reiterated that a consortium of school systems in Georgia is pursing legal action against the state over the funding issue.
Both McGhee and associate superintendent Allen McCannon said that system leaders seek to improve the school system at the lowest possible local burden. McGhee, who noted that Madison County was the second-lowest per-pupil spender in the Northeast Georgia RESA, said the school system leadership must be good stewards of taxpayers’ money, but must ultimately ensure that children in the 4,700-student system are properly educated.
“If it comes down to hurting the kids or raising another dollar, I’m going to recommend raising the dollar if that’s the choice,” McGhee said. “But at the same, we know — it’s painful.”