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Morgan schools take a $500,000 hit
System must wait a year for car tag tax revenue

By Bayne Hughes 340-2432

The oversight that let a car tag tax expire and almost led to the loss of a property tax is costing financially strapped Morgan County schools more than originally projected.

Finance Director Rodger Spillers learned Tuesday that the county will not resume collecting the car tax until January, meaning the school system will lose another $500,000.

The Morgan County school board discovered in early September 2006 that a 7.3 mill property and motor vehicle tax would expire Sept. 30. County voters re-authorized the tax, which generates about $5 million annually for the schools, on Jan. 17.

Property tax continues

Property tax collections continued without pause, and Spillers said he and school officials thought motor vehicle tax collection would resume after the vote, resulting in lost revenue for only the first three months of fiscal 2007, about $115,000.

The school system's fiscal year began Oct. 1.

But when Spillers noticed tax revenue was still lagging, he called Deputy License Commissioner Patsy Dougherty.

On advice of county attorney Bill Shinn, Dougherty told Spillers that, according to state law, the county only collects the motor vehicle tax between Jan. 1 and Dec. 31. Because reauthorization did not occur until Jan. 17, she said, collection of the tax could not resume until January 2008.

After the school board's called meeting Tuesday, Spillers said waiting 12 more months to start collections would mean the loss of about another $500,000 from the school system's general fund.

License Commissioner Sue Roan's office is not collecting the tax when county drivers pay for their car tags during 2007. According to Dougherty, drivers should see a 73-cent reduction for every $100 on the assessed value of their vehicle. For example, the cost of a tag on a $20,000 vehicle would decrease about $14.80.

Dougherty said license office is asking for an opinion from the state attorney general's office on the issue.

Newly elected Superintendent Bob Balch said the loss of $615,000 total is another financial setback for a school system under a state mandate to reduce its expenses and rebuild is savings account.

The state wants the school system to have about $4.5 million in its reserve, equal to one month's operating expenses. But budget projections show Morgan County ending the fiscal year on Sept. 30 with about $1.1 million, if this ruling stands.

School officials are also considering the possibility that the state Legislature will approve a 7 percent teacher pay raise, which could cost Morgan County about $150,000.

The school board approved a plan to start building its fund by not replacing teachers or staff lost to retirements, resignations or non-renewals of contract. The superintendent said he, the board and state Board of Education officials may have to take a second look at the plan.

"We're already in a tough situation," Balch said. "And this just makes it worse."

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