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School sales tax funding exceeds projections

POSTED: October 23, 2013 4:00 a.m.

Dawson County's 1-cent sales tax for education is running $1 million over projections and about 18 months ahead of schedule, officials report.

Voters approved a five-year extension of the program, also known as an education local option sales tax, or ELOST, in November 2009.

The measure, which passed with 77.7 percent of the vote, was projected to generate about $30 million over five years.

"When we started working on this ELOST, we were very conservative about what we thought we could reach," said Jamie Ulrich, director of financial services for the school system. "We worked with financial institutes to work out our projections."

Listed projects included paying off the high school's construction costs from a previous bond program and buying buses, computers and facilities.

The uptick in revenue also continues despite a state change that redirected taxes from motor vehicle sales.

"Now that money is coming over into general funds because it's an ad valorem tax and no longer a sales tax," Ulrich said.

Still, sales tax revenue continues to exceed projections, according to Dawson County School Superintendent Keith Porter.

"When I looked at the ELOST history and, even with the ad valorem tax removed, which we started receiving in April, we've yet to be under projection," he said.

To date, the system has collected about $14.9 million since June 2011. The original estimate was about $13.9 million. The last check is scheduled to arrive May 16, 2016.

According to Ulrich, the system bonded out $15 million of the funds to be used immediately after the measure passed. It was then put on a five-year payment schedule to pay that back.

"We have to pay the bonded money off during the time the ELOST runs," she said. "It can't extend beyond that time."

The remaining sales tax revenue comes in via a quarterly setup. The state collects the money, with the system not receiving funds until two months later.

"In the quarter that we reach $30 million, that will be the last quarter that we will collect money for that ELOST," Ulrich said.

This puts the ELOST at almost halfway to completion and nearly 18 months ahead of schedule.

"It would be a good thing if we didn't reach our goal in March's payout," Ulrich said. "If it happens in April, we get to collect the balance of that quarter that put us over $30 million. You are allowed to collect the two-month span over projection."

While an increase in the economy was figured into this year's estimates, the revenue is way over projections.

Porter noted that while sales tax funding is strong, they system is "struggling for money for maintenance and operations." In addition, sales tax revenue can be used only for the stated purposes.

"We've been clear in our desire to see flexibility in ELOST funds. We understand that it would be necessary to put that before the voters first and have them agree with what we wanted to do, having some of the sales tax dollars going into the general account," Porter said.

"There's been resistance on a state level to changing how ELOST funds are appropriated, but it would truly benefit Dawson County's schools and community greatly to have flexibility with that one cent."

 

 

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