Reassessment Overcharge Spent
by Alex Saitta
August 29, 2006
Here are the basic facts that washed out of last night's meeting.
Spending is $1.6 higher. The $1.6 million overcharge or credit is now gone. Last year the tax rate was 109 mills and the tax rate will be 109 mills again this year. Explain to me how taxpayers were given back the $1.6 million overcharge, when they are paying the same amount in school taxes this year as they did last year? The fact of the matter is, the $1.6 million overcharge was not given back to the taxpayers. It was applied to new spending instead.
Here is my quote from a recent Greenville News article: "The bottom line is, the board grew spending an extra $1.6 million at that special June meeting, said board member Alex Saitta. And instead of raising your taxes 4 mills to pay for it, it used the reassessment credit instead to cover the new expense."
In May the school board approved the final budget and kept the tax rate at 109 mills. In the final budget, there was no tax increase. In June, the board re-opened the budget, raised spending $1.6 million and raised taxes from 109 to 113, or 4-mills (or $1.6 million) to fund the new spending. In July the auditor notified the school board it accidentially overcharged the people $1.6 million in last year's reassessment, and that money was now sitting in the school district's saving account.Last night, all the school board did was reduce the tax rate by 4-mills, back to 109 mills, and shifted over the $1.6 million overcharge from the school district's savings account to the checkbook and used that money to pay for the new spending.
Instead of paying for the new spending with a higher tax rate, as was originally voted on, the new spending was paid for with the $1.6 million overcharge. In the end, spending was increased $1.6 million, the $1.6 million overcharge or credit is now gone, and the taxpayers paid 109 mills last year and will pay 109 mills again this year. Again, show me how that money was given back to the taxpayers. It wasn't.
Last night the school board took two votes. The first was to reverse their tax increase from 113 to 109 mills. I voted for that. The second vote was to shift the $1.6 million overcharge from the savings account to the checking account, and it was used to pay for the new spending. I voted against that, because the overcharge was not given back to the taxpayer. The proof is the tax rate will be 109 mills this year, or the same as it was last year.
District Office Press Release:
I give the Superintendent credit, she did say the overcharge was spent on technology in the press release.
This came from the district office press release: After months of fact-finding and extensive discussions about $1.6 million in excess FY06 collections, the School District of Pickens County Board of Trustees decided at the August 28 meeting to credit taxpayers in Tax Year 2006. $1,642,789 in technology expenditures budgeted in FY07 will be financed from the district’s fund balance.
(Translation: The $1.6 overcharge that was sitting in the school district's savings account or fund balance, was spent on new technology. How they call that "to credit taxpayers" is beyond me.)
The press lease continues: “Reducing the millage next year to credit the taxpayers will result in a fund balance decrease because we will immediately use over $1.6 million for technology,” said Dr. Lee M. D’Andrea, superintendent.
When you overcharge someone, you need to pay them back, period, end of story. Let's say your accountant agrees to fill out your tax forms for $50, and for some reason you accidentally pay $75. If your accountant then tells you he needs the extra $25 to buy floor mats in his car, you are going to tell him to get lost, right? The overcharge should be returned to you, regardless of his "need".
Revenue for the Pickens County School District is up 7% this year, while enrollment has grown less than 1%. We are getting enough money to address the problems we face. We need to better manage our budget.
To those who disagree, I ask, why do you think our bosses -- the people and the state legislature -- are taking away the fiscal independence of school boards? Because they think school boards are doing a great job managing their fiscal independence? No, they think school boards are doing a poor job of managing their money. If school boards don't improve, the people and the legislature will take away more of their fiscal independence and that will be a bad thing.
What The Board Should Have Done:
If the board wanted to give the money back to the taxpayer, they would have done two things. The first vote would have been to reduce the tax rate from 113 to back to 109 mills or the rate it had approved with the final budget in May, and rescinded the $1.6 million in new spending. That would have left overcharge of $1.6, untouched, sitting in the saving account. Second, the board would have then voted to reduce the millage, from 109 mills to 105 mills or by $1.6 million. That would have given the overcharge of $1.6 million back to the taxpayers.
In sum, the board kept the extra $1.6 million in technology spending, and used the $1.6 overcharge to fund that.