Schools hit by sales tax drop

By Holli Keaton (Contact) | Troy Messenger

Published Thursday, July 23, 2009

As Pike County took its biggest hit yet on sales tax decreases last month, school systems collecting their share felt the loss just the same.

The Pike County Board of Education saw a more than 15 percent drop in its June sales tax collections, compared to this same time last year.

Overall, that’s a $40,000 drop for the month and a $128,855 decrease for Pike County Schools System for the year.

But county schools Superintendent Mark Bazzell said it’s a drop the system was somewhat prepared to handle.

“We were very conservative in what we thought our sales taxes were going to be this year,” Bazzell said. “I don’t think we planned for it to be 5.8 percent, but we did plan for a slow down.”

The loss for the Troy City Schools System was even greater.

Comparing the two months, city schools have seen a drop of 23 percent, said Superintendent Linda Felton-Smith.

For Troy City Schools that marks a more than $68,000 decrease comparing the two months. Collectively, city schools have lost about 7.5 percent in sales taxes for the year.

“The 23 percent decrease is the largest we’re experiencing this year,” Felton-Smith said.

But Felton-Smith and Bazzell said this one-month downturn won’t keep the school systems from making it through the rest of their budget year, which ends Sept. 31.

Instead, it presents concerns for budgeting in the next year.

“With a 23 percent decrease for June 2009, my concern is the amount we will budget for 2010,” Felton-Smith said.

Both school systems will begin budget planning in August, and those plans will be based on projections for this year’s funds.

Still, Bazzell said if all goes as planned, school systems will fair well considering a 12.5 percent proration declared earlier this year.

“We’re going to finish the year, considering the original 12.5 percent proration, in very good shape,” Bazzell said.

But, if what Bazzell is hearing is true, school systems may not be that lucky.

Bazzell said local superintendents have been informed from state officials proration could increase by as high as 3 percent in this budget year. That would be added to the already 9 percent proration, lowered after help from the state Rainy Day Fund.

If that were to happen, Bazzell said there would be little the school system could do to offset the costs.

“If that happens, it’s so late in the school year, there’s nothing you can do to mitigate that,” Bazzell said.

“There’s no cuts to make in the last two months of the fiscal year. We’ll still be able to deal with it, but it will come off our bottom line.”

And higher proration coupled with sales tax decreases certainly couldn’t be good news.

Sales taxes for schools are split between the two systems based on population.

They split the income of one-cent and then split 75 percent of an additional penny.

“That has been our bread and butter,” Bazzell said. “We’re just like everyone else. We’re just praying we have a turn around in the economy.”

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