The Effingham County School System is looking at a deficit of more than $6.3 million for its current budget year, the system’s finance director told school board members.
As of Aug. 31, the school system had a deficit $6,315,458.
Finance director Ron Wilson said that as of Aug. 31 the system had collected $585,982 in taxes. The budgeted amount for the year is $26,410,294.Wilson said the system has had operating losses for two months.
“The primary reason for that is local property taxes have not been coming in,” he said. “That’s typical of July and August — the bad part about it is they’re still not coming in.”
Tax bills have not been mailed and with no tax bills, that means no property tax coming in.
“That negative $6 million is substantial,” Wilson said. “It’s only two months.”
Wilson said there were only $300,000 in tax collections in September, and it’s not enough to pay the operating expenses. Superintendent Randy Shearouse said the system budgeted for the same amount of property taxes as last year.
“We still have not set a millage rate because the assessments have not been finalized, so that number could change,” Shearouse said. “The intent of the board was to keep everything the same.”
Shearouse said the school system’s coffers have lean times up until about October when property tax revenues begin to come in.
“But the bills have not been sent out yet, and we don’t know when they are going to be sent out,” he said. “We do feel like we can borrow from some other accounts we have to make payroll until the end of the year.”
Normally the tax bills are sent in September and due in November.
“Most people would pay before December because they want the tax credit on this year’s taxes,” Shearouse said.
Shearouse said that the property owners can’t pay the taxes if they don’t have a bill.
Shearouse said the system hopes by that time tax bills have been sent out and the funds are coming into the system.
School systems used to get what are known as TANs to tide them over in lean times until the tax money started to accumulate.
“It wouldn’t be any use in getting a TAN at this point because we would have to pay it off the last day of December,” Shearouse said ‘and we wouldn’t have the money if the tax bills weren’t sent out to pay that TAN back.”
He said as of Jan. 1 if the tax bills have not been sent out, at that point the system could look into a TAN.
“Hopefully we won’t have to do any of that,” Shearouse said. “Saying all that to say it’s lean times, we’re going pretty good, I think, as a system. But we are having to borrow money from other accounts to make payroll every month.”