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Gainesville schools likely to pay tax anticipation note on time

POSTED: December 23, 2008 5:00 a.m.

Although tax collections have been slow in coming, Gainesville school system’s finance director said the system likely will be able to pay off its more than $7.5 million tax anticipation note by the year’s end.

At a November meeting of the Gainesville school board, Gainesville schools finance director Janet Allison said due to slow tax collections and the system’s multimillion dollar deficit, she was "worried" the school system might not be able to pay off the note by Dec. 31, as required by law. A tax anticipation note allows the school board to do a short-term borrowing of cash to keep the school system running until anticipated tax revenues are collected.

"I think we’re going to be OK just based on the information I got Friday from the tax collector’s office," Allison said.

With Gainesville tax bills due Dec. 22, Allison said the school system has received $9.4 million in local tax revenue between July 1 and Nov. 31. She said last fiscal year, the school system collected $22.3 million in local ad valorem taxes, $10.5 million of which was collected during December.

"I’ll be here monitoring (collections) over the (holiday) break," she said. "Immediately after the break, we’re going to come back and take a look and make new projections. We’ll estimate when and how much we’ll need for another tax anticipation note."

Allison said a tax anticipation note is a common fiscal management tool school boards use. She said she expects to pay the note and nearly $84,000 in interest on the note on Dec. 30 or Dec. 31. The law requires school boards to pay off the tax anticipation note before bonds can be issued for another.

As of the latest financial statements dated Oct. 31, the school system collected $14 million, including state and local revenue, since July 1 but had expenditures totaling $17.7 million through Oct. 31, Allison said.

Allison said that shortfall was expected, and the Gainesville school board took out the $7.5 million tax anticipation note in late June to cover the school system’s expenses this fall.

Allison said school system leaders are continuously scrutinizing this year’s budget for further cuts to the system’s initial $53.7 million budget. She’s also looking ahead to potential cuts to budgets for next year and the following year.

"Seriously, everyday we’re looking for ways to cut this year’s budget ... in ways that will have the least impact on student achievement," Allison said.

By April, the state audit for fiscal year 2008, which ended June 30, should be complete. At that point, the school system will have a definitive figure for the system’s deficit, which Allison said she expects will hover around $5.8 million.



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