January 20th Statement by Rowan County Commission Chair Jim Sides
♦I want to correct a couple of false statements that continue to be made over and over again by those who are either ignorant of the facts, or they desire to willingly ignore the facts.
All article 40 and article 42 sales taxes and all lottery proceeds are revenue streams for the counties, not for the schools!
- Article 40 sales tax – NC GS 105-481 and 105-487
- Article 42 sales tax – NC GS 105-496 and 105-502
- Lottery proceeds – NC GS 18c-160 and 18C-164 (c-2) and NC GS 115C-546.1
In addition, the county does not use or withhold one thin dime of any of these funds for any purpose other than capital needs of the school system. We are not stealing the lottery funds from the schools and we are not stealing the sales tax proceeds from the schools. We are operating 100% within the guidelines of the NC generals statutes in the use and distribution of these funds.
Another false statement that is continually made is that the county uses only lottery proceeds and sales tax proceeds to pay for school capital debt. I will quote from Dr. Richard miller’s letter of January 10, 2014: “for far too long the primary method of financing has been through loans and debt service, paid back by using state sales tax money and lottery proceeds which are inadequate to meet the school system’s capital needs. Those sources of state funds were intended to supplement, not supplant, local responsibility to provide for school capital needs. In effect, you are requiring us to use these dedicated streams to repay funds borrowed to finance school facilities, without using any local funds whatsoever.” That statement is completely false.
I have requested that our assistant county manager supply all school board members with a spreadsheet which clearly outlines all county capital debt for the school system from 2014 to 2021. Over the next six years, the spreadsheet clearly shows that for this and the next five years, an average of $6,750,000 of local property tax dollars will be taken from the county general fund to service school debt. For the last five years, that amount was between $5,4 million and $7.0 million. This is twice the amount of all lottery proceeds and sales tax proceeds combined and currently used to pay debt service for the schools.
Also, we are not requiring the schools to use these dedicated streams of funds for debt service. We are simply exercising our legislative authority to appropriate those funds for that purpose. It is our decision… not the school boards. As Dr. Miller earlier stated, referring to the board of commissioners, “it is up to you to determine the method of financing.” I could not agree more.
With that said, I will not vote for any agreement that ties the hands of this board or any future board in how the lottery proceeds or the article 40 and 42 sales tax proceeds are distributed.
I also will not vote for any agreement that allocates more money to any project than is actually needed for that project. There will be no open appropriations, where funds not used for an identified project can be redirected somewhere else. We will only borrow what is needed.
In relation to the energy program for existing school buildings, which has been discussed on numerous occasions, the BOC has previously agreed to allow this project to move forward. I am not in favor of the school system undertaking this project themselves. It should be bid out and the contract awarded to the company that offers to provide the best possible upgrades at no cost to the county or the school system.
If you want the $40,000,000, here are the three ways I would agree for you to receive it:
- The three identified projects would be initiated on a staggered schedule. Priority one could start immediately, priority two could start nine months later, priority three could start nine months later. All projects would be financed with article 40 and article 42 sales tax proceeds. We could dip into the $3.2 million unallocated surplus capital funds held by the school system to supply bridge financing for the debt until the 1993 bonds are paid off.
- We could place all three projects on a bond referendum that we would send to the county taxpayers to be voted on in November of this year. The three projects would be voted on separately and the tax rate increase to fund each would be listed. Whatever is approved by the voters would move forward. Any project not approved by the voters would die until a revenue stream is available to fund that project.
- Take us to court. If the court awards the BOE $40 million dollars, we will raise taxes as required and move forward with all identified projects.
I think it is high time we get rid of the high priced lawyers, form a capital committee to meet at least quarterly, and begin to sit down and resolve all of these problems one at a time. You all have received a spreadsheet indicating the amount of money that has been literally wasted thus far in these negotiations. More than $165,000.00 has been spent on lawyers. This has done nothing to educate one single child or to hire a single needed educator.
If it is about the children, let us stop making it about the lawyers.
If the school board does decide to move forward with a lawsuit against the county, I want to remind them of several things:
It is not this board of 5 commissioners that is being sued. It is the 138,000 citizens who reside in this county. You will be saying to them that you are smarter than them and the commissioners they elected to represent them. You will be saying that the legislature was wrong in establishing the checks and balances regarding school debt. You will be saying that decisions of taxation and funding would be better placed in the hands of the school board than the county commissioners.
I am sorry, but I could not disagree more.
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The following charts by RFP staff illustrate the current debt Rowan County has for RSSS schools and the debt the Board of Education voted to demand:
Current Debt
Debt Desired by RSSS Board of Education
