BOE considers borrowing
Published 4:02 pm Wednesday, September 18, 2002
By By Robbie Byrd, News Editor
(Editor's note: This is the last in a series of articles focusing on school funding and how it is affecting area students.)
With local schools shrinking budgets and falling enrollments, officials with the Escambia County Board of Education are facing the possibility of borrowing money in the near future.
The system is facing some very serious problems: losing teacher units funded by the state as a result of declining enrollment and beginning to feel the monetary squeeze of two years of proration and last year's reduced funding.
The Alabama Department of Education recommends that all systems retain at least one month's salaries on hand at all times. Officials with the system have said that over the next year they will be unable to meet that recommendation.
County Superintendent Buck Powell is looking to the future and said that the school will have to find more funds in order to avoid borrowing or cutting out some programs.
"The only way to continue the way we are now is through an increase in funding," Powell said. "You wouldn't operate any business today at 1990 expenses and that is true for education systems as well. We need to increase our income to make up for higher costs and decreases in funding."
In addition to proration the system is also losing money through oil severance money and local tax revenues.
"The economy needs to change in order to see a positive change in funding," Powell said. "The oil severance money allowed us to do a lot of things in the past that we can't do anymore. That money is running out and it is not coming back."
Powell has addressed the county commission regarding future funding. The commission, during a meeting in August, said they wanted to hold a workshop with school officials to discuss funding.
"The commissioners are adamant about not raising taxes. The only way they will do that is if it is approved in a vote by the people. I hope if it does come to that the people will understand the position the schools are in.
"Alabama pays the lowest taxes per capita of anyone in the nation. And, Escambia County is pretty far down the list of counties in the state paying taxes.
Right now, on a local level, the county school system receives funds through a seven mill ad valoren tax and a one cent sales tax. Atmore has an additional sales tax that is used only for those schools within the city.
Raising taxes on the local level is not the only way to raise school funding. State Superintendent Ed Richardson is currently promoting REACH, Realizing Every Alabama Child's Hopes, a plan that would generate new tax revenues based on what other "peer states" have done.
According to Richardson, Alabama ranks last among southeastern states in tax effort - the measure to which a state utilizes its tax base for social services such as highways, law enforcement and education.
While Alabama is ranked 42 in average annual income, the state is still ahead of southern states such as Louisiana, Arkansas and Mississippi. Alabama is ranked last in taxes paid per capita. Of the 12 states in the southeast, Alabama ranks eighth, only six dollars behind Kentucky, in tax capacity, or the ability to raise revenues.
With these rankings, Richardson claims that if Alabama made the same tax effort as our peer states, annual revenues would increase.
"Surely we can aspire to reach the same tax effort as the average of the lowest states in the southeast," Richardson said.
According to Richardson, if Alabama were to collect the average of our peer states, $1.6 billion would be generated each year for public schools and other government services. Richardson claims that Alabama has much tax capacity that is not being utilized.
While Alabama schools have often been compared with neighboring state Mississippi, when it comes to taxes, there is no comparison, according to Powell.
"About 85 percent of school systems in Mississippi get 33 mills or more of taxes," he said. "But, in Alabama, nearly 85 percent of schools get less than 23 mills of tax support. We can no longer say, 'thank God for Mississippi'."
If the REACH plan was adopted, the ALDE claims Escambia County would receive about $4.2 million in funding.
"It could be the answer to every school systems' problems," Powell said.
But, Powell also said that, if history is any sign, the state will not adopt any new legislation to help fund schools.
"This money would have to be generated through taxes and I'm not sure the state legislature would do that. They have not been favorable of doing things to help fund schools in the past," he said.
Powell said it would be more ideal if the target of education taxes were directed toward industry.
"Certain industries have not been paying their share in taxes," Powell said.