Tax hike possible if cuts not made to school district’s budget

Published 12:15am Monday, May 27, 2013

NATCHEZ Adams County residents could see their property taxes go up slightly if the Natchez-Adams School District can’t find $500,000 in savings soon.

The potential tax increase would mean a homeowner with a house assessed at $100,000 could wind up paying nearly $19 more in annual property tax.

School officials say raising taxes won’t be considered until every feasible expense cut has been squeezed from next year’s budget. The preliminary budget for next year currently has a deficit of $911,906.

The district currently receives $11,686,653 from local ad valorem taxes, which is generated by taxes on real estate property, automobile tags, business equipment etc.

Last year, the district raised local taxes and in turn received an additional $565,000

NASD Business Manager Margaret Parson said the district being underfunded by the state again this year is affecting the district’s budget.

This year the district will receive $15,080,189 from the state — a $330,057 decrease from last year.

“The state is severely cutting us,” Parson said. “When a budget is out of balance you either have to increase revenue or decrease spending.”

Last year, property taxes on a house assessed at $100,000 were $1,539 before any rebates, such as homestead exception.

The total millage including county, city and schools was 153.822.

Parson said the state regulates how much districts can ask for in ad valorem tax increases through a formula that incorporates what the district received last year and what it will receive this year, among other things. Once that number is calculated into a base rate, the district can only request between 4 and 7 percent more in increases.

Parson said she hadn’t made the exact calculations using the state’s formula, but estimated that the district could receive approximately $400,000 in additional funding by requesting additional mills.

If the board did decide to request additional funds, Parson said the district would have to advertise the increase for two weeks as well as host a public hearing all before Aug. 15, which is when the resolution must be approved and sent to the Adams County Board of Supervisors to be converted into a millage.

County Administrator Joe Murray said he believed a school mill was worth approximately $214,000, meaning the amount the district could request would total approximately 2 mills.

If no other tax millage or assessed property values were to change, taxpayers would then factor in 155.822 mills into their tax bill.

Last week, NASD school board members identified nearly $400,000 in expense cuts and asked Superintendent Frederick Hill to find the remaining $500,000 needed to balance the district’s budget.

“Before we go to taxpayers and ask for more money, we need to make sure we’ve done everything possible,” board President Wayne Barnett said. “If there’s fat in this budget, let’s get rid of the fat and if there’s something that needs to be or can be cut, let’s put it on the table and talk about it.”

But as board members and district officials continued examining the areas they said they felt could be cut to reach the additional $500,000, the items to cut became smaller and smaller.

“When you’re looking at this, I don’t see where there’s fat,” Hill said. “We can make arguments for each one of these things.”

Ultimately, the board asked Hill to create budget proposals that incorporated a 5-percent across-the-board cut. Those cuts would go to non-mandated expenses such as athletics, travel and administrative salaries.

The option to explore the tax increase was also mentioned by board members after examining the cuts.

“If we have to do it, we have to do it but we need to make sure we’ve done everything possible before,” Barnett said. “Even if it means a 10-percent cut because it’s going to be hard to justify a tax increase when you have salaries and people can say, ‘How can you pay this much in salaries and raise taxes?’

“We may not meet that magic number, but let’s put all this on the table and see what we can cut first.”

The school board is scheduled to meet again Thursday to review the budget proposals they requested Hill create.

Regardless of whether or not taxes are increased, the district will host a public hearing July 3 regarding its budget before it’s adopted at the board’s regular monthly meeting on July 11.

The potential tax increase would mean a homeowner with a house assessed at $100,000 could wind up paying nearly $19 more in annual property tax.

School officials say raising taxes won’t be considered until every feasible expense cut has been squeezed from next year’s budget. The preliminary budget for next year currently has a deficit of $911,906.

The district currently receives $11,686,653 from local ad valorem taxes, which is generated by taxes on real estate property, automobile tags, business equipment etc.

Last year, the district raised local taxes and in turn received an additional $565,000

NASD Business Manager Margaret Parson said the district being underfunded by the state again this year is affecting the district’s budget.

This year the district will receive $15,080,189 from the state — a $330,057 decrease from last year.

“The state is severely cutting us,” Parson said. “When a budget is out of balance you either have to increase revenue or decrease spending.”

Last year, property taxes on a house assessed at $100,000 were $1,539 before any rebates, such as homestead exception.

The total millage including county, city and schools was 153.822.

Parson said the state regulates how much districts can ask for in ad valorem tax increases through a formula that incorporates what the district received last year and what it will receive this year, among other things. Once that number is calculated into a base rate, the district can only request between 4 and 7 percent more in increases.

Parson said she hadn’t made the exact calculations using the state’s formula, but estimated that the district could receive approximately $400,000 in additional funding by requesting additional mills.

If the board did decide to request additional funds, Parson said the district would have to advertise the increase for two weeks as well as host a public hearing all before Aug. 15, which is when the resolution must be approved and sent to the Adams County Board of Supervisors to be converted into a millage.

County Administrator Joe Murray said he believed a school mill was worth approximately $214,000, meaning the amount the district could request would total approximately 2 mills.

If no other tax millage or assessed property values were to change, taxpayers would then factor in 155.822 mills into their tax bill.

Last week, NASD school board members identified nearly $400,000 in expense cuts and asked Superintendent Frederick Hill to find the remaining $500,000 needed to balance the district’s budget.

“Before we go to taxpayers and ask for more money, we need to make sure we’ve done everything possible,” board President Wayne Barnett said. “If there’s fat in this budget, let’s get rid of the fat and if there’s something that needs to be or can be cut, let’s put it on the table and talk about it.”

But as board members and district officials continued examining the areas they said they felt could be cut to reach the additional $500,000, the items to cut became smaller and smaller.

“When you’re looking at this, I don’t see where there’s fat,” Hill said. “We can make arguments for each one of these things.”

Ultimately, the board asked Hill to create budget proposals that incorporated a 5-percent across-the-board cut. Those cuts would go to non-mandated expenses such as athletics, travel and administrative salaries.

The option to explore the tax increase was also mentioned by board members after examining the cuts.

“If we have to do it, we have to do it but we need to make sure we’ve done everything possible before,” Barnett said. “Even if it means a 10-percent cut because it’s going to be hard to justify a tax increase when you have salaries and people can say, ‘How can you pay this much in salaries and raise taxes?’

“We may not meet that magic number, but let’s put all this on the table and see what we can cut first.”

The school board is scheduled to meet again Thursday to review the budget proposals they requested Hill create.

Regardless of whether or not taxes are increased, the district will host a public hearing July 3 regarding its budget before it’s adopted at the board’s regular monthly meeting on July 11.