EDUCATION: CAPE SCHOOLS MOVE FUNDS TO PAY BILLS

They're not exactly robbing Peter to pay Paul, but the Cape Girardeau Board of Education's approval of a budget amendment Tuesday had the same result.

In a special meeting, the School Board voted to free up cash to help pay the district's bills next month by redesignating $546,000 that had been earmarked for future land acquisition.

The money, which the district received in 1999 after selling a parcel of land on the northeast corner of Bertling and Sprigg streets near Blanchard Elementary School, eventually would have been used to purchase land for a new elementary school. But District Superintendent Dr. Dan Steska said end-of-the-year cash flow problems were more pressing because of the district's dependence upon late-coming, local tax revenue and a civil suit against the state, which is delaying a $1 million allocation to cover construction costs at the new Career and Technology Center.

"What we're asking the board to do is temporarily use that money to facilitate the cash flow for the next couple of months," said Steska. "It's pretty common for school districts in October and November to be at their lowest amount of tax availability."

The $560,000 will barely make a dent in the district's monthly budget, which typically averages between $2 million and $2.5 million. The monthly budget is up to around $3 million while the district makes monthly payments to contractors completing construction of the Career and Technology Center.

"They have a draw schedule and you pay so much per month based on the degree of completion," Steska said. "That is having a major effect on our monthly expenses right now."

Timeliness of personal property tax payments affects how some school districts spend revenue. Cape Girardeau County Collector Diane Diebold said tax bills usually are mailed in by mid-November, and most residents pay their personal property taxes in the last two weeks of December.

Tax money on hand is then forwarded to school districts in January and February, and late payments trickle in the rest of the year. This schedule means school districts sometimes must resort to spending reserve balances in late fall and replenishing them with tax revenue the following year, setting up a cycle that is hard to get out of, Steska said.

In Cape Girardeau schools, the cycle is even worse because the district depends heavily on local tax revenue as opposed to state revenue, which comes in equal monthly payments. Local funding comprises more than 40 percent of the district's annual revenue.

Diebold expects to have about $1 million on hand for Cape Girardeau schools by early December. If possible, she said, she will forward some funding to the district early to help with cash flow problems.

Even with the early access to tax revenue, Steska said it might be necessary for the district to file for a tax anticipation note, a special loan made to districts until they receive the bulk of their local tax funding. Tax anticipation notes are not the best solution for cash flow problems because "we have to pay interest on that loan, at least on the amount we use," he said..