By: Michael Campbell | Twitter: @itsthesoup
Posted: Mar. 9, 2018 | 2:15 p.m.
PRINCE GEORGE – Much to the delight of Prince George County School Board members and school division leaders in the audience, County Administrator Percy Ashcraft’s budget sees an increase in local funding thanks to the county and school board’s revenue-sharing agreement, known as the MOU, or memorandum of understanding.
During his detailed presentation, Ashcraft confirmed that the local transfer to the school division in his proposed Fiscal Year 2019 budget would see an increase of $241,677 as his budget features the full funding of the county’s MOU with Prince George County Public Schools, bringing the local transfer, including Children’s Services Act funding to $16.49 million, up just over one percent from the previous financial year and an increase from Prince George Schools Superintendent Renee Williams proposed budget she presented to the school board and public in mid-February.
In her budget, the school division’s county funding request was kept at FY2018’s level, where the school division received just over $16 million.
Unlike some other localities, Prince George County and the Prince George School Board currently follow a memorandum of understanding that acts as a guiding document that dictates how much local funding the school division receives in a given year from a group of five different revenue sources – real estate revenue, personal property tax, local sales tax, consumer utility tax, and motor vehicle license. The amount that Prince George Schools is entitled to from those five revenue sources is calculated by determining the average of the last five years of the school division’s population and the county population, resulting in the current 43.1 percent of those five revenue sources going to Prince George County Public Schools as part of the county’s local funding.
Using that percentage as a guide, with one penny in real estate tax revenue in Prince George County representing $250,000, Prince George Schools receives $107,975 for every penny the county gets, while the county gets the remaining $142,025.
This memorandum of understanding and the language that prescribes that the school system is entitled to 43.1 percent of any tax revenue is now the subject of conversation between both the Prince George Board of Supervisors and county school board as the county faces the challenge of trying to pay for a request from the school system to replace a pair of aging elementary schools.
Last year, members of the school division’s core committee presented a lengthy and expensive proposal to supervisors that would see both Walton and Beazley elementary schools replaced with new facilities as both are seen as aging facilities in need of replacement along with safety concerns due to both being open-campus schools. According to school division officials, Walton was built in 1960 and Beazley was constructed in 1964.
At that time, it was estimated that each new school would cost roughly $25 million, using the new North Elementary School’s price tag as a barometer of what a new 750-student facility would cost, with both costing Prince George $50 million based on that estimation.
Last month, supervisors were briefed on financing options to pay for the schools across a variety of scenarios, each of which having their own real estate tax implications as the construction of one or more schools would likely see the county’s real estate tax rate rise in the coming financial year.
Using that data as a guide, Ashcraft’s proposed budget provides just over $29.1 million in capital project funding for construction of a new Walton Elementary School. While the decision of which school is replaced would be the choice of the school board, according to the county’s capital improvement committee, the group ranked a new Walton Elementary School higher than a new Beazley at second and fourth respectively on their list of priority projects. Presently, Ashcraft’s budget does not spell out plans for building a second elementary school.
As a result of the nearly $30 million price tag associated with the construction of the new school, Ashcraft’s budget proposes a five-cent increase to the county’s real estate tax rate to help pay for the large-scale capital project, but in order for the project to receive the financing it needs, the county and school board’s MOU has to be adjusted.
Given the current language of the MOU, the school division would be entitled to 43.1 percent of any real estate tax revenue, including the revenue from the proposed increase, reducing the amount of revenue the county would get to help pay for the capital project, which has led to active talks of altering the MOU to exclude funds that would be used for school-related capital projects.
The preliminary language being looked at for inclusion in the MOU would allow for “revenue created by increases in rates of real estate, personal property, local sales, consumer utility (gas, mobile phone, telephone, and electric) taxes, and motor vehicle licenses … so long as such additional revenue is allocated to school capital expenditures.”
During previous meetings and work sessions, county officials have said if the MOU is not amended, any tax increase would have to be nearly doubled to receive the proper financing to cover the costs of the construction of the school.
In February, school officials expressed their willingness to adjust the current MOU to allow for that exception to be added.
“We do think it is time to revisit it,” Prince George School Board Chairman Robert Cox said to supervisors. “We would like to see our finance director, the county finance director, and the county attorney work on parameters of this and then bring it back to us and start looking at this together. The memorandum of understanding is an important document but it needs to be a working document.”
He went on to say that the school board would stand with the county if a tax increase was needed to pay for one or both new schools.
“I’m a taxpayer in the county so I don’t want to see my taxes go up either,” Cox said. “But when they need to go up for the needs of the county, I think we can all get behind that and support it. If it comes to a tax increase for schools, we are going to be standing shoulder-to-shoulder with you. If you’re raising them for schools, we share that load with you. We have to get better together.”
While Ashcraft’s proposed budget doesn’t discuss plans for building a second elementary school, the county’s financing scenarios looked at only building one school in FY2019, building both in FY2019, and building one school in FY2019 and the second one in FY2021. In addition, neither the financing scenarios or Ashcraft’s budget discussed another proposal from the school division’s core committee in August of 2017 that called for the renovations to Prince George High School to help extend the life of that building, which was built in 1976.
At that time, the renovations were estimated to add a minimum of $30 million to the price tag of the two elementary schools project if done together, bringing the ballpark figure of the project over $80 million, which could go higher if a technical wing was added to the school.
No further presentations have been made to supervisors on the high school renovations proposal since the August 2017 initial presentation.
Ashcraft’s budget is now in the hands of supervisors who will continue to fine-tune the budget through a series of work sessions, the first of which being scheduled for March 7 in the county board room at 6 p.m. All work sessions are open to the public. Supervisors are expected to make a decision on the tax rate that will be advertised for a public hearing at that meeting.
Once supervisors select a tax rate and it goes out for advertisement to the public, it cannot be raised higher than the advertised amount but it can be lowered.
The county has until June 30 to officially adopt their FY2019 budget.