County schools ask for one-cent sales tax

By Staff
Jonathan Willis
The Franklin County School Board unanimously voted Thursday to ask the county commission to pass a one-cent sales tax increase that would aid the cash-strapped system.
The county currently has a one-cent sales tax with all proceeds going to the county's two school systems.
The Franklin County schools system receives 58 percent of all money generated by the current one-cent tax while 42 percent is used by the Russellville city schools system.
Both systems have been hit hard by the current state issued proration.
"Our system has suffered financially for the past couple of years," county schools superintendent Gary Williams said. "Last November we were hit with nine percent proration until July when that changed to 11 percent, so two percent was added back to November, then July, August and September was 11 percent."
Williams said proration cost the system more than $2.4 million in the previous year. Gov. Bob Riley has already stated that there will be a 7.5 percent proration this current year, which will cut the county system another $1.4 million.
"We have made cuts to our budget for the last two or three years," Williams said.
"Three years ago, we were 13 units over the foundation level which means that we had to pay 13 teachers plus benefits, totaling on average about $70,000 out of local funds. We have cut those units to two."
Further cuts will have to be made to get that number to zero.
"We are not wasting any money in our system," he said. "There are still a few cuts that we will have to make as time allows, but right now all we can do is to try to pay our bills."
Williams contributed the system's financial woes to two factors – proration and debt.
"Last year and this year together we will have been cut by the State Department $3.8 million that we will never regain. We make debt payments of $1.3 million per year. We cannot continue to run our schools on the amount of funds that we are receiving."
There are 132 school systems in the state of Alabama and the Franklin County system ranks no. 132 in the amount of local funding it receives and in the amount of money in it's month's fund balance.
The law requires school systems to work toward having a one months fund balance. In the county system that requirement is $2.1 million.
When the previous fiscal year ended on Sept. 30, Franklin County had a fund balance of negative $3.5 million dollars.
To compound the problem, the allocation the system receives each month for payroll is $280,000 short.
The system obtained a $3 million line of credit at a local bank, but has been forced to use all but $300,000 of that total.
"This means that we have to come up with some other means to make our payroll," Williams said.
"We have looked very closely and have found ways to meet our needs until the end of February 2010. At that point in time we do not know what will happen. We will not be able to meet our payroll obligations at that point unless we can find access to more funds."
The school board voted Thursday to ask the county commission to levy a one-cent sales tax increase.
"Our fate at this time is in their hands," Williams said.
The board asked for one of two options, which include: levying a sales tax immediately until the election in June 2010 and then put a referendum on the ballot for the people to decide on a tax for three years with the option of voting again after the three years is up or simply levying a one cent sales tax for three years.
"This is the last thing that I want to do, but our backs are against the wall with no other way to turn," Williams said.
He will address the county commission during a work session at 6 p.m. Monday at the Elizabeth Lucas Courthouse annex building.
A one-cent sales tax increase by the county would generate an estimated $2 million per year. Of that total, the county system would receive about $1.2 million and the city system would receive $800,000.
"It would not solve all of our problems, but it would go a long way in helping us," Williams said.
The Russellville City Council has been split for more than a month on whether or not to add a one-cent sales tax in the city. This week they voted to give the city schools system 38.33 percent of all revenue generated by the city's current three-sent sales tax.