By SANDY SEAL / L’Observateur / April 19, 1999

LUTCHER – A net drop in sales and use tax collections, as well as improvement and betterment projects implemented this school year, will decrease the St. James Parish School System’s accumulated surplus nearly$1 million by the end of the fiscal year.

And more than a million of the surplus funds remaining would be committed to paying for those same projects, decreasing the surplus funds even further, according to Jim Mitchell, director of Financial Management for the school system.

Mitchell told St. James School Board members Tuesday night the budgetadopted in August 1998 called for the board to have an accumulated surplus of $4.748 million on June 30, 1999. However, due to theinstability of collection levels, as well as the improvement projects approved by the School Board, the number will likely be around $3.8million at that point.

Mitchell’s budget update comes as fiscal year 1999 is three-fourths complete. He said several board initiatives approved throughout the 1999fiscal year, as well as the drop in collections, will impact the general fund budget revision that will be presented for approval in June.

Smith said current estimates call for sales and use tax collections to be down some $800,000 from the budget of $7.8 million, representing a $1.34million drop from the 1998 levels. This decrease is offset by collectionsof $362,000 over the budgeted amount in 1998, he said, decreasing the surplus some $418,000.

Smith said sales tax numbers reflect some $200,000 that has been refunded to taxpayers for overpayment in prior years. Another $100,000 isexpected to be refunded pending the outcome of a tax audit currently in progress, he added.

Improvement and betterment projects implemented during the 1999 fiscal year – with some costs being spread over several years – include air conditioning repairs and roof replacements at Fifth Ward Elementary and Romeville Elementary; St. James Parish School Board computer system forY2K compliance; professional development and textbook adoption; Lutcher High School weight room; computer plan for schools; and computers for principals. Total costs for those projects this year will be about$541,000, Smith said.

While the board can expect to finish the fiscal year with a $3.8 millionsurplus, Smith said $1.64 of that would be committed to additionalpayments on the improvement and betterment projects, leaving the board with just over $2 million in uncommitted surplus funds.

“The board has been able to fund very ambitious academic and capital projects through the general fund, however, without new revenue sources or increases in current revenue sources, breakeven operational budgets appear to be mandatory for the foreseeable future,” Smith said.

Smith added in his report that increases in ad valorem tax collections and state Minimum Foundation Program funding, along with budget savings in other areas, will help offset unbudgeted increases in salary and related benefit costs due to state pay raises, subsequent board personnel action and other payroll related costs as well as anticipated increases in sewerage, air conditioning and utilities expenditures.

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