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Declining Tax Revenues Force Saline Schools To Borrow To Cover Bond Debt

District to borrow $103,000 to help cover gap in principal and interest payment.

Hits from reduced taxable values and tax abatement are forcing Saline Area Schools to borrow money this year from school loan revolving fund.

The district needs to borrow around $103,000 to meet its $10.3 million loan payment. The district came up short after tax revenues didn’t cover the need.

The Board of Education approved the loan Tuesday night.

“Last year we were able to make the payment,” Finance Director Janice Warner said. “This year we moved back in to the borrowing mode.”

The reason for that is taxable values has declined and the district has taken hits from tax abatements issues by local governments and from revisions in the value of corporations, Warner said.

The district levies seven mills for all its debt loans. Sometimes, like this year, the levy doesn’t cover the principal and interest. The school loan fund picks up the difference, Warner said.

“As those bonds get paid down, eventually we will get to the point where that seven mills is more than we need to pay the principal and interest,” she said. “Then we can start paying back the bond loan fund.”

The district is right at that point, but with tax values not rising like they have in the past, the school is bumped back, Warner said.

The district’s bond debt is $28.3 million. With the $103,000 borrowed and accrued interest of $1.4 million, the new debt total will be $29.88 million.

SCOOBYDOO August 17, 2012 at 11:09 AM
Very sorry Saline Schools that we taxpayers cannot afford to feed the beast at an ever increasing rate. Guess we should eat nothing but beans and rice.
john Waterman August 17, 2012 at 12:36 PM
I do not consider the education of our children a beast. We are starving our schools and hurting our children to save a few dolliars in taxes. Employees have taken pay cuts, pay more for benefits and will now be getting reductions in retirement programs . Corporations and businesses just received a huge tax cut last year. I will be saving about $50 in state income tax to satisfy tax cut addicts. We are playing a dangerous game of how much can we cut school funding before our schools fail. Saline schools is our communitiy's greatest asset. I feel the current addiction to tax cuts is the real beast we are feeding. Now we are at the stage that the beast wants to take our children's education.
Duckengine August 20, 2012 at 02:39 PM
Between over zealous comensation packages to acquire CEO's and tax abatements to lure businesses; i don't know which is worse. We have to stop this kowtowing to big businesses and it has to be done by all communties together. We are only continuing to line the pockets of the big exec's (that don't need it!) with minimal return to the community. We bend over backwards for these companies so they will come to our Cities and bring jobs yet we as a City get little in return with the tax abatements and the jobs offer little pay with no oppurtunity for training and advancement and the jobs are in many cases going to workers living outside of Saline. The majority of the workers (eg. at Faurecia) make less than $15/hr and those are the more senior positions. $12/hr is $25,000 for an entire year, if you're working full time. Take out taxes and you're down to $21,000 cash in your pocket. If you're paying $500/mo for rent and $250 for a car payment; you're down to $11,000 a year. With no pensions anymore, you're left to save for your retirement. Now imagine all that with a spouse and 2 kids to support. It's poverty folks. Compare that to an Exec making $500,000/yr base salary with bonuses on top. And when the bottom falls out and "they quit" or even get fired, they get another fat check to say good bye.

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