Do they need more tax money?

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As stimulus funds dry up, school board wrestles with possible tax hike


Increased costs, decreased state and federal funding and taxpayer burden will all factor into the Anderson County Board of Education’s decision next Wednesday on what to do with its tax rate.

But what is driving those increases and decreases?

To help the public understand more about those increases and decreases before next Wednesday night’s pubic hearing, The Anderson News asked the school’s chief finance officer, Nick Clark, to share some insight on both.

Using a copy of a slide presentation he made to the school board late last month, the newspaper asked Clark to explain several factors, including a slide titled “New/Increased Expenses.”

That slide includes $1.2 million in funds the school system received as part of the federal government’s stimulus package last year.

Although the stimulus funds were a one-time injection of cash into the system, Clark said he still considers not getting it in the future a new or increased expense.

“Yeah, we do,” Clark said. “We’ve lost funds from the state over the last year by [the state] mandating pay raises — not this year, but in the prior year. They’ve made us increase our expenditures but have not funded them.”

Clark said the district used the stimulus money, which will run out at the end of the school year, to pay teachers already on staff that used to be paid out of the district’s general fund, along with funding for special education and Title 1.

“We knew it would be a one-time influx then gone,” he said. “We didn’t want to hire an employee, pay with [stimulus funds] and then have them no longer have a job.”

The slide also claims that the district has been cut $200,000 in state funds.

The school system in 2008-09 received approximately $13.7 million in state funding. In 2009-10 that number was trimmed to $12.5 million but offset by the state adding to it $1.2 million in stimulus funding it received from the federal government.

This year the state is providing $12.5 million again, but adding only $1 million in stimulus funds, resulting in $200,000 less in overall state funding.

Clark said it’s anyone’s guess if, now that the stimulus funds are expired, the state will revert back to giving the school district the $13.7 million it provided in 2008-09.

“It should go back up, but I don’t think it will,” he said. “That’s my personal opinion.”

Another $200,000 increased expense comes in payroll. Although the state did not mandate payroll increases this year, the school board previously voted to initiate “step” increases for employees. Those increases are based on a formula designed around longevity and other factors, and this year’s increase raises the district’s estimated payroll of $20 million by 1.5 percent. An additional $60,000 is estimated in costs associated with the teachers’ retirement system, Clark said.

Another claimed funding cut on the slide is $159,000 for preschool tuition provided by the state.

Clark said that’s because the state is being more “stringent” in providing tuition for students into the largely income-based program for those not yet old enough to attend kindergarten.

“We’ve had to make some concessions where we had to reduce the number of students that qualified,” he said. “With that reduction in qualifying students, our funding has been cut.”

The preschool program does allow parents to pay tuition for a child, but Clark said that fee isn’t enough to cover the actual cost.

“We want to keep our cost to a tuition-based child as low as possible,” he said.

At stake for taxpayers is how much their property tax bills will go up or down based on the decision the school board reaches next Wednesday night.

One of the district’s options is to take a 4 percent revenue increase, which was passed but later rescinded following a school board meeting late last month.

Chairman Lee Hahn, who typically does not cast votes unless a vote of a full board ends in a tie, did not vote on the increase.

By not voting, though, his vote is legally a vote against and nullified a vote to take the increase by board members Benita Young and Steve Higgins. Fellow board member Roger McDowell voted against the increase.

The board is one member short, meaning the result was actually 2-2, and ties lose.

That 4 percent revenue increase would result in the district’s tax rate going from $5.52 per $1,000 assessed value to $5.69, a 3 percent rate increase. That would increase the tax bill on a home assessed at $100,000 from $552 to $569. Doing so would provide the school district with roughly $500,000 more revenue than the previous year, bring the locally collected total to $8.15 million.

That amount is roughly $1.7 million more than the district collected in local tax revenue in 2004.

The so-called compensating rate — the rate that will provide roughly the same revenue as last year — would actually lower tax bills while providing a slight increase in revenue for the school district.

The compensating rate would lower the school tax rate from $5.52 per $1,000 of assessed value to $5.48. That means a home assessed at $100,000 would see its tax bill reduced from $552 to $548.

E-mail Ben Carlson at bcarlson@theandersonnews.com.