Reserve fund use likely for schools

TAXING QUESTION

By Mark Bliss ~ Southeast Missourian

The Cape Girardeau Board of Education may dip into the district's $2.7 million in reserve funds for the coming school year instead of increasing the tax levy by 6 cents to make up for a projected revenue shortfall.

"One possibility is to bite the bullet and get by for another year," superintendent Mark Bowles said Thursday. He said school board members are considering that possibility because of public outcry over the suggested tax increase.

"The board has gotten a lot of feedback," he said.

The school board will discuss the issue when it meets at 5:45 p.m. Monday at the board office at 301 N. Clark Ave.

Bowles said the school district is feeling a financial pinch because assessed valuation -- the tax value of property -- barely increased over last year.

Slight increase

School officials said preliminary figures suggested the assessed valuation decreased. But final figures show the district with an assessed valuation this year of $426.9 million, or $425,638 more than in 2001, Bowles said.

Still, that's about $12.4 million less in assessed valuation than school officials had anticipated. As a result, the district stands to receive $510,000 less in tax revenue than it had projected, Bowles said.

Bowles said last week he would recommend the district increase its levy from $3.99 to $4.05 per $100 assessed valuation, a move that would bring the district $256,000 in added revenue. Under state law, the district could increase the levy by as much as 15 cents without a vote.

The 6-cent hike wouldn't make up for the entire shortfall, but it would help, he said.

If the school board doesn't raise the tax levy, the district will be forced to dip into reserves, Bowles said.

School officials based the budget on a conservative 3 percent growth in the assessed valuation, but the valuation actually grew by only about a tenth of a percent.

Bowles said growth in previous years had been around 5 percent. "We estimated at 3 percent just to be safe," he said.

New construction helps

New construction accounted for $7.2 million in assessed valuation. Excluding new construction, the assessed valuation actually decreased about 1.6 percent, Bowles said.

Jerry Reynolds, Cape Girardeau County assessor, blamed the district's financial woes on significant drops in the assessed valuations of two major manufacturers: BioKyowa and Lone Star Industries.

Locally assessed personal property -- which excludes railroads and utilities that are assessed by the state -- decreased from $99.8 million to $97.2 million in the school district.

The drop was fueled by a decrease of over $2 million in the valuation of equipment at the Lone Star plant and the Biokyowa plant combined, the assessor said.

Reynolds said depreciation and the lack of any major purchase of equipment accounted for the drop at Lone Star.

At BioKyowa, depreciation and the company's decision to shut down a production line accounted for the decrease, the assessor said. The company announced last October it was laying off 45 people and ceasing production of the amino acid lysine, a feed additive.

There was an even bigger drop in the assessed valuation of real estate at BioKyowa because of the closing of several buildings at the plant, Reynolds said. The assessed valuation of real estate at the plant dropped from $6.6 million in 2001 to $1.89 million this year, a drop of more than $4.7 million, he said.

Even with that decrease, locally assessed real estate overall in the district increased nearly $3 million to $319.8 million.

Reynolds said he expects the valuation to rebound at BioKyowa when the company retools to produce industrial-grade amino acids for export to Japan.

mbliss@semissourian.com

335-6611, extension 123