CANTON — By reallocating part of the money collected from property taxes, the Cherokee County School District could reduce borrowing by $20 million during the next few years, school board members were told this week.
Chief Financial Officer Ken Owen gave an update to board members Thursday on a proposed financial initiative, described as a “limited pay as you go plan” to have the district pay for construction and other projects at least partially from current funding, rather than bonds. If the district shifts half a mill of existing property tax to pay for debt service, it can reduce debt from an estimated $115 million to $95 million during the five-year term of the Education Special Purpose Local Option Sales Tax, Owen said.
For the past 18 years, 100 percent of the money from Ed-SPLOST has been used to pay back debt, while bonds were taken out for new school buildings, technology and other large expenses. Last summer, the board moved a half mill of property taxes to debt service, so the proposal would bring it up to a full mill. The proposal would use less than 25 percent of Ed-SPLOST money for current expenses.
“It’s a good step for us to do some ‘pay as you go.’ We’ve talked in a lot of different sessions about trying to flip the game and not bond as much, to get into a situation like other counties around us that have a rich collection on the penny and millage,” said Superintendent Brian Hightower. “To think we can cut down the borrowing from 115 down to 95, not borrowing $20 million is for me, very exciting.”
A preliminary budget will be presented to the school board next month, where it will be tabled. Then there will be three public hearings on the budget June 12 and June 20 before the board votes at the June 20 meeting.