Conservative budgeting avoids $1M increase for taxpayers
The St. Charles Parish School Board approved adjusted millage rates for tax year 2016, but taxpayers won’t see an increase.
Although the overall tax rate will remain the same at 55.76 mills, as it has been over the last three years, a rate hike to 55.85 mills had been discussed but rejected. The School System, like the parish government, is contending with a downturn in oil prices that has cut into a major source of funding called the inventory tax, which is assessed based on the value of goods stored in the parish. A major part of this inventory is oil, and the reassessment reflected that financial hit.
During a presentation by St. Charles Public School’s Chief Financial Officer and Legislative Liaison Jim Melohn at last week’s meeting of the Board’s Finance and Audit Committee, Melohn detailed the proposed plan, which called for the same tax rate despite the need to raise taxes in three different areas (the funds dealing with maintenance and operation, construction and its constitutional fund). Instead of increasing the overall tax rate, the board approved lowering the bond millage, which impacts funds the school system uses for debt repayment.
Melohn said the goal was to avoid raising the overall millage rate for taxpayers while also addressing the school district’s needs in terms of the general fund.
“It’s a unique circumstance the parish was in this past year,” he said. “We wanted to find a way that we could increase the amount we have in the general and construction funds while offsetting that by reducing the rate elsewhere. While doing that, we knew we had to still maintain what we need for the repayment of the debts. That way, we could do it with no increase in tax rates to the taxpayers of St. Charles Parish.”
Maintaining the current rate as opposed to shifting to the higher millage rate of 55.85 will save just over $1 million for taxpayers, Melohn said.
Although the overall tax rate remained level to taxpayers, the board did approve rate increases for three areas: the constitutional tax was increased to 4.12 mills, from 4.05; the operations and maintenance tax will rise from 41.86 mills, up from 41.16, and the school construction and improvement tax to 4.77 mills up from 4.69. The bond millage is falling to 5.01 mills from 5.86 mills.
“We tried to be fiscally responsible,” Melohn said. “We are bringing down our fund balance, so we really can’t take a hit in the general fund but we have the ability to do it in a way where we aren’t increasing tax rates for citizens.”
Melohn said the school system’s balance of available funds allows the cut in the bond millage. He said the rate has been historically calculated very conservatively, in order to cover anything unforeseen that may crop up, and that the school system has consistently been able to reduce the bond tax rate over the years.
Melohn supplied numbers to illustrate this point: in 1995, the bond rate was 8.70 mills; in 2003, 6.86; in 2009, 6.36; and from 2010 through 2015, 5.86. He said projections indicate the bond millage could be lowered once again over the next four years, and given the current situation, the decision was made to lower it early.
“If we had kept debt service [the bond millage] where it is, our general and construction fund would have lost in excess of one million dollars,” Melohn said. “It was a hit we couldn’t afford to take.”
During the presentation, he pointed out that the Board has consistently reduced the millage rate parish wide over the past 30 years, noting the rate has come down from a high point of 61.44 mills to 55.76.
“In dollars and cents, that’s equivalent under today’s assessed value of a savings to the taxpayers of a little over $7 million,” Melohn said.
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