A budget deficit and serious cash flow problems at the Carroll County School District may leave no choice but to raise taxes and pare staffing further, a financial adviser says.
Bo Surrell was sent by the Mississippi Department of Education to investigate the district’s financial situation. He was to present his report on the district’s financial condition to the Mississippi Board of Education in Jackson today.
The adviser made a similar presentation to the Carroll County School Board last week in which he outlined the district’s financial predicament. He recommended that the school board request a 4 percent ad valorem tax increase from the county.
“I’m a taxpayer, and I’m sensitive to paying taxes,” Surrell said at the May 8 meeting. “I’m also sensitive to the integrity of the finances of the school district. The problem here is that there is no leeway.”
Surrell also recommended additional cuts to the district’s budget, including further reducing staff at the three schools.
Surrell is working in the school district office at the behest of the state education department after a district financial audit showed a negative balance of $1.4 million in the general fund and a true budget deficit of $35,463.
Under Mississippi law, a school district is not allowed to go into the red in its general fund.
The district’s school board has long refused to raise the ad valorem millage rate, the local property tax rate that funds the school district.
According to Mimi Alldread, the district’s business manager, the ad valorem revenue at the district has dropped since 2007. That year, the district brought in $2 million in local tax revenue. This year, Alldread said, the school board requested $1,994,762.
“Along with MAEP cuts and increases in expenses, that created the perfect storm,” Surrell said at last week’s meeting, referring to the formula used to determine state funding.
Facing dropping local revenues and cutbacks at the state level, the district has turned to borrowing from its 16th Section leases principal funds. These funds, unlike the interest funds, can be used only for construction or school bus purchases.
Even though the funds are owed to the district, the full amount still must be paid back under state law. That leaves the district in a serious cash crunch.
Surrell said he was “looking at everything to cut.” With the majority of the district’s expenses tied up in teacher salaries, he said savings would likely come there.
Three teachers are leaving J.Z. George Middle School, netting a projected savings of $170,000, Surrell said. At Marshall Elementary School, the staff has been cut back to the lowest levels allowed by law, saving another $100,000.
This morning, Carroll Count School Superintendent Billy Joe Ferguson said cuts won’t be enough to dig the district out of the hole. The superintendent said he’s been asking the board to raise taxes for years.
“We can’t cut any more and meet accreditation standards,” he said. “I’ve warned them, tried to tell them about it, but it’s like talking into a deaf ear. They just keep saying, ‘You got to keep cutting.’”
Ferguson said the district has already cut foreign languages and other programs and last year laid off a security officer and several teaching assistants. The average school bus in the district is around 14 years old, he said.
Meanwhile, Ferguson said, the cost of everything from fuel and tires to pensions and insurance have increased.
“We’re doing that to barely keep our head above water, and it’s because of declining revenue,” Ferguson said.
Ben Shute, who served on the school board until 2012, said this morning that the issue wasn’t the taxes.
“Mr. Ferguson would never agree to cut his expenditures. He’s supposed to operate in the budget he’s given,” Shute said. “You can raise the taxes all you want, but he won’t stay in budget.”
Shute also suggested that the schools are still overstaffed and that the county’s millage rates have been kept low because the property values there are relatively high.
Surrell, during his presentation last week, compared Carroll County with 13 other school districts of similar size and population. He said Carroll County ranked in the middle in terms of enrollment and the assessed valuation of property. The rate at which that property is taxed, however, was the lowest in the comparison.
Reggie Ross of the Carrollton Conservative contributed to this report.
• Contact Bryn Stole at 581-7235 or bstole@gwcommonwealth.com.
