The cost of educating children is going up in Commerce.
Citing reduced SPLOST funding, its operational deficit and state spending cuts, the Commerce Board of Education voted Monday night to levy a new three-mill bond tax rate for this fall and plans to increase the tax rate for maintenance and operations (M/0) one mill to 20 mills.
The board will hold three public hearings required by law before increasing the M/O millage rate to the state maximum of 20 mills. It is not required to conduct public hearings for establishing a school bond rate, according to superintendent of schools Joy Tolbert.
A mill is equal to a tax of $1 for every $1,000 of assessed value. On a $100,000 house properly assessed at $40,000, the four-mill total increase would amount to $160 more per year in taxes, less any deduction for homestead exemption.
Board members agreed at the Thursday “work session” that the one-mill hike in the M/O levy is necessary to get the school out of a deficit that now stands at $230,000.
Keeping the rate at 19 mills would have reduced the deficit to just under $163,000 by the end of the current school year, Tolbert explained, while a 20-mill levy would “bring us back to zero.”
The increase comes in spite of a slight increase — four-tenths of a percent — in the Commerce tax digest, and in spite of a line-by-line scrutiny of the budget seeking ways to trim spending. Tolbert reported to the school board Thursday that a Department of Education consultant helped the system “maximize” its state funding under the Quality Basic Education formula. The consultant observed that the school system is already under-staffed.
Tolbert also cited costs that are both mandatory and increasing, particularly the system’s cost for health insurance for all personnel and a hike in the cost of funding the teacher retirement system.
“Those are mandates,” she reminded. “We can’t change that. It is what it is.”
Tolbert also pointed out that state “austerity cuts” since 2003 have cost the school system $8.2 million “that our students have earned through the QBE formula, but that money was never sent to Commerce. …The battle we face (is) increased benefits we can’t do anything about, and we’re still focused on operating a school system and the state continues to cut the funds.”
A 19-mill levy would have generated $3.093 million in local taxes; 20 mills will bring in $3.256 million. The total budget, including all sources of revenue will be $11,589,808.
Chairman Rodney Gary on Thursday offered the possibility that when the current deficit is erased the M/O tax rate could be reduced.
“Once we get back on our feet, we can always drop the millage rate to get back where we need to be,” he said.
Because it is raising taxes, the board must conduct three public hearings. The board voted Monday night to hold those at 9 a.m. and 6 p.m. on Monday, Sept. 23, and at 6:30 p.m. on Thursday, Sept. 30, before adopting the school budget and setting the tax rate in a called meeting at 7:00 that night.
Bond Tax Rate
Tolbert introduced the school board to the concept of the school bond tax at Monday’s meeting. First, she treated the BOE to a history lesson, reminding that the city’s voters authorized $20 million in general obligation bonds in 2006 to pay for the new Commerce High School, renovations of the old high school for a new central office, and the track at the middle school. In 2007, at the board’s request, the city council passed a tax levy resolution allowing the school board to levy bond taxes to make principal and interest payments.
Since that time, the system made its bond payments using SPLOST revenue, which averaged more than $100,000 a month. Currently, revenue is running around $90,000 per month, leaving projected SPLOST revenue $316,000 short of meeting the $1.3 million bond payments for 2014. The reduction is a result of the combination of a recalculation of the division of the SPLOST, which saw the city schools’ share fall from 14 percent to 12 percent of the countywide total, and a lackluster economy.
That projected SPLOST shortfall amounts to a little over two mills in city taxes.
Tolbert proposed a three-mill bond levy to enable the system to free up some of its SPLOST revenue for items like textbooks and technology that are no longer affordable under what she called “a bare-bones” M/0 budget.
“Right now, to give the kids what they need, I think that’s what we have to do,” Tolbert said.
She got no opposition from her board. Paul Sergent and Bill Davis both indicated agreement. “The whole goal is to finish in the black,” noted member Kyle Moore. Gary and Authur Lee Pattman indicated their agreement. When it came time to vote, the three-mill bond levy passed unanimously.