Ellington

Millage rates—property taxes—might sound about as far from "sexy" as any story can be. But the well-being of Jackson Public Schools depends largely on the city allocating enough money to meet the schools' needs. And the schools' needs translate directly into the district's ability to meet the educational needs of the city's young people.

Jackson Public Schools Board members spent a good chunk of their June 12 budget meeting discussing millage rates. In what should be a straightforward process, property taxes collected from the citizens and businesses of Jackson make up about one-third of the JPS budget, which has come in between $198 million and $210 million annually since the 2010-2011 school year. The rest comes from state programs, such as the Mississippi Adequate Education Program, federal funding and other revenue sources.

By law, Mississippi municipalities are obligated to give their school districts the funds they request, as long as the school district stays within 4 percent of the previous year's request. Exceed that amount, and the district's citizens get a vote on the increase.

In Jackson, for example, voters approved a $150 million bond issue in 2006 to build a new school and make repairs to existing structures. With that vote, citizens agreed that the city could increase property tax rates to repay the bond.

This year, like every late spring and summer, JPS is calculating how much money it will need from the city to meet its needs for the upcoming year. The budget is divided into two sizable chunks. The first chunk goes to the school's operating budget, covering things like salaries, books and electric bills. The second chunk goes to paying off debt, such as the 2006 bond issue.

In August, calculations in hand, JPS will go to the Jackson City Council for its approval, which is a mere formality, in most cases. The council sends the JPS request to the city administration, which calculates how many mills it will take to cover the school district's request, and the city tells JPS how many mills it will dedicate to its schools. (See the sidebar "What's a Mill?" for an explanation.)

If the city doesn't collect enough property taxes to cover the request, JPS has options: First, dip into its reserves for the current year; second, at the end of the year, request a "shortfall note" from the city so that the millage applied to the school budget can be increased next year to replenish the district's reserves.

It seems like a straightforward process, but that's not what's been happening.

JPS has seen a shortfall between what it requests and what it receives from the city every year except one for at least the past eight years. For the 2005-2006 year, the shortfall was just shy of $410,000; in the 2011-2012 school year, the shortfall was $8.9 million. The one exception is 2007-2008, which shows a surplus of $342,500.14.

"The millage, as set by the city, has been inaccurate," board member George Schimmel said at the June 12 meeting. He indicated that the cumulative shortfall amount is in the vicinity of $20 million, and he questioned why JPS has never issued a shortfall note to make up the difference.

Sharolyn Miller, JPS chief financial officer, said that it was an "administrative" decision to use the district's general fund rather than issue shortfall notes. She indicated that during Gov. Haley Barbour's administration, the governor made a "great push" for schools to "utilize their fund balance" instead of raising taxes on citizens.

At some point, Schimmel said, that practice made for "poor financial management," and he asked Miller why JPS continued not to give the city a shortfall note even when taxpayers had voted for an increase to cover the 2006 bond issue.

Miller repeated that it was the decision of the administration, referring to the JPS superintendent.

The district has seen a number of individuals in the superintendent's spot in recent years. Cedrick Gray took over July 1, 2012, after a yearlong recruitment process after the city did not renew former Supervisor Lonnie Edwards' contract.

"The city shortchanged us," Schimmel said.

JPS seems to be in agreement with Schimmel. The district has requested an opinion from the state attorney general's office regarding how it might make up those lost funds.

"We're working the issue out," Miller said, adding that, hopefully, the district and the city can find a solution short of litigation. Last year, JPS sued the city when the council refused to accept an amended budget asking for additional funds. That suit has yet to be settled; however, it seems unlikely that JPS will be able to squeeze funds from the city retroactively when the district hasn't requested them for years.

The man responsible for setting the mills assigned to JPS by the city of Jackson is Director of Administration Lee Unger, Miller said. When the city does not assign enough millage, the school district has to use its general funds, even if the city collects 100 percent of what property owners owe.

That reserve should be roughly 6 percent of the JPS budget, Miller said, or about $11 million to $12 million. At the present time, the reserve fund, or general fund, contains about $3.6 million, she added.

Rick Hill, the city's deputy director of administration, returned calls regarding the city's role. Hill is second in command in Unger's office. His signature appears on the JPS Budget Certification for 2011-2012 sent to the state Department of Education and obtained by the Jackson Free Press. While he could not answer many questions due to the JPS lawsuit against the city, he confirmed that his office is responsible for assigning mills to JPS. He also provided mill values to the JFP for the past decade.

From the 2006-2007 school year through 2011-2012, the value of one mill ranged from $1.05 million to $1.14 million. The JPS request from the city also varied. In the same period, the lowest amount JPS requested was $78.3 million, the highest $87.4 million.

Given those two fluctuating values, one could deduce that the millage calculated to cover JPS' budgets would also fluctuate. But it hasn't. The millage set by the city of Jackson for JPS has remained constant at 74.99 since 2007.

Both parties, it seems, have fallen short. At the very least, JPS and the city are guilty of doing really bad math. At worst, someone's tinkering with the numbers.