New Madrid R-1 School District makes up for loss of local revenue
NEW MADRID COUNTY, MO (KFVS) - Noranda didn't pay their tax bill earlier in 2016, costing the New Madrid County school district, and the district anticipates Noranda won't pay their 2016 tax bill either.
This year is different because Noranda, a business that employed 930 people, filed for bankruptcy.
According to New Madrid County R-1 School District Superintendent Dr. Sam Duncan, the district lost $3.1 million in revenue so far.
"Fiscal security, financial strength was the number one strength that they saw in the district," Dr. Duncan said.
Dr. Duncan was hired in December to replace a retiring superintendent for the district, he said everything financially looked good coming into the job.
"Now if you would ironically, enough put that up against what happened December 31st, 2015 at that point Noranda failed to pay it's 2015 tax bill," he said.
So, now the district is proposing increasing a tax Dr. Duncan said the schools desperately need.
"Our endeavor in this financial crisis is to keep our students first," Dr. Duncan said, "establishing a balanced budget without compromising class size or educational quality."
A couple of locals I spoke with say they understand the district is in a tough spot.
"Yeah I think it would be okay to pay the taxes or whatever because it won't be much," Amber Johnson said.
"It's not really expensive, if you look at it in 12 months time, that's not expensive because you're putting that into your community," Rose Jackson said.
Dr. Duncan agreed.
"I am a taxpayer in the district, for me that's very important, not just because I feel like the board wants me to be here, but for me I feel like I should be contributing," Dr. Duncan said.
He said the millions of dollars account for one-sixth of the district's total budget or 29 percent of its local revenue.
"We know times are tight," Dr. Duncan said. "We're trying to be very measured."
In 2006, Dr. Duncan said the voters approved an increase in the school district's operating levy of 80 cents on every $100 in assessed valuation, which would bring the operating levy to $3.55.
He said this increase has been phased in over the last 10 years in 5 and 10 cent increments, and in some years, has remained uncollected.
The current tax rate is 3.6851 for the R-1 School District, which according to Dr. Duncan, includes 3.4451 in operating levy and 24 cents in debt service levy.
Here is what district leaders are proposing, an increase in an already existing tax.
For example, a person who owns a $100,000 home would pay an additional $28.50 to their property bill.
Now, with a proposed increase to 29 cents from 24 cents, the new tax rate would be at 3.84.
Dr. Duncan said the school district had to maintain payments for its bonds and could not go unpaid.
He said the school district has $5.5 million in outstanding bonds, and bond payments cannot go unpaid.
Based on the district's bond agent's analysis, the district would need to increase it by 5 cents to meet its bond requirements.
In addition to the tax, the district eliminated 25 positions from people leaving and not filling the positions. They also eliminated three administrator positions, froze salaries, reduced employee benefits and cut back on general operating supplies and expenditures.
On August 26, 2016, the district will hold a tax rate hearing, something every district is required to hold each year.
If the district approves the increase property owners could see the it on their November bill.
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