Local News

April 17, 2013

ESPLOST revenue lagging

First two months of sales tax below projections

(Continued)

Differences from July ballot

Hale says the $105 million — the number voters were given when they approved the tax — could be a “rosy scenario.” ESPLOST collections continue until revenues hit the ballot number or five years is up, whichever comes first.

A budget forecast provided by the county school system anticipates $56.5 million over five years, a $12 million difference than what was on the ballot in July. A city school budget forecast expects $30 million, not the $36.5 million voters approved.

To generate $105 million in five years the ESPLOST would have to bring in $1.1 million a month for county schools and a $605,833 a month for city schools. Both marks aren’t likely to be hit even in the best months, Perry said.

“The resolution the voters approved is not a projection of what we think we’re going to collect,” she said. “We actually — on purpose — pick a very high number, but from a budget standpoint we’re using $30 million as opposed to $36.5 million.

“We do not believe we will collect $36.5 million. But if the economy were to improve beyond anyone’s expectations, we don’t want to lose out. Really, right now we’re budgeting for $30 million but it looks like we won’t even hit $30 million.”

Hale said the number on the ballot was intended to tell voters “what the school systems expected to receive.”

“The actual resolution the board took for the tax had to state how much we thought we were going to get,” he said. “That’s required by law. But the $68.65 million figure assumes a 5 percent increase in sales tax revenue each year for the five years. The $56.5 million is more conservative.”

Asked where the projection for a 5 percent increase in sales tax revenue comes from, Hale said it has “no basis.”

Perry said the city schools did not assume a 5 percent revenue and projected an initial overestimation instead.

“The 5 percent increase is a rosy expectation that things will be great and booming,” Hale said. “We didn’t want the ESPLOST to cap off before the five years was up so we added the increase. This is reasonable, not completely out of hand. ... If we hit the $68.65 million or if we hit five years of collections the tax will stop, whichever comes first.”

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