Loss of property tax puts county schools in bind

By Staff
Clif Knight, Hartselle Enquirer
Morgan County Schools could lose as much as $500,000 in property tax revenue because a state law is preventing the county’s license department from collecting a 7.3 mill property tax from motor vehicles owners who live in the county school district in 2007 even though voters reauthorized the tax in a special election on Jan.17.
When the 30-year tax expired Sept. 30, 2006, school officials expected that a loss of about $115,000 would occur from then until the election date. However, they were caught by surprise when they learned that the tax would not become effective again until Jan.1, 2008.
Dougherty said the State Department of Revenue later issued a similar opinion.
School officials anticipated receiving the tax in 2007 and included it as a revenue source in the 2006-07 operating budget, according to Rodger Spillers, finance director.
Superintendent Bob Balch said loss of the revenue represents another obstacle in the way of the school system’s efforts to build up a reserve fund that complies with a state mandate.
The State Department of Education wants each of its school systems to have enough money in reserve to take care of operating expenses for one month. To do that the Morgan County system would need $4.5 million. At the end of the 2006-06 fiscal year last September, it had $1.1 million in reserve.