TUPELO – September’s state funding cuts have forced the Tupelo Public School District to borrow $2 million as it waits for local tax revenue to arrive.
Generally, most local tax money comes in late January, February and March as people pay property taxes.
TPSD Finance Manager Linda Pannell said at Tuesday’s board meeting that the loan is a safety net because the district wouldn’t otherwise have enough left in its fund balance to pay teacher salaries.
She said the “very short-term loan” would be repaid as quickly as the district receives enough tax revenue to cover its expenses and repay the loan. Bids will go out and the district will borrow from the bank with the lowest interest rate.
The state cut its funding for education by 5 percent. Pannell said that the problem was that those cuts came after the district’s budget had been approved.
“If we’re told at the beginning of the budget year we have full funding, then we budget accordingly and hire personnel accordingly,” Pannell said.
“Then after the year gets started and contracts are issued, we’re told they’re not going to fully fund it. If we know up front how much money we’re getting, we can plan accordingly and not find ourselves in this type of situation.”
In January 2009, the district had to borrow $1 million for the same reason after the state made a smaller cut of school funding in the middle of the year. Those budget cuts have diminished the fund balance that the district relies upon until property tax money arrives.
Contact Chris Kieffer at (662) 678-1590 or at firstname.lastname@example.org.
Chris Kieffer/NEMS Daily Journal