LOXLEY – Rising sales tax income increased Baldwin County School System revenue in the last year, but some of that money could be needed if the cost of the new career-tech high school exceeds estimates as expected, system officials said Tuesday.
John Wilson, chief financial officer for the system, told members of the Baldwin County Board of Education that despite the impact of COVID-19 on the economy, revenue has exceeded expectations. The board held its August meeting at the Central Office Satellite in Loxley.
As of July, revenue from the 1-percent sales tax was up almost 24 percent for the current fiscal year that ends on Sept. 30, Wilson said.
“If you’re looking at FY 20, the 1 percent sales tax was at $33.5 million and if you look at where we are now, we’re $41.4 million,” Wilson said. “That’s an almost $8 million increase or 24 percent increase over the year.”
The current income also exceeds the total for the fiscal year before the pandemic began. In the 2019 fiscal year, 1-percent sales tax revenue as of July was about $33.57 million, according to school system reports.
“We have exceeded expectations, which is always a good thing,” Wilson said. “Sales tax revenue continues to be extremely, extremely strong and continues to exceed all our expectations.”
The totals give the system an overall fund balance of $80.2 million. Wilson said, however, that some of that money could be needed before the end of the fiscal year.
State funding for the school system will not be paid until the start of the new fiscal year on Oct. 1. As the Baldwin County school system grows, however, increased expenses for the new academic year that began this month are already being spent.
In July 2020, the system had a fund balance of $78.9 million. By September 2020, the balance had dropped to $67.6 million.
Wilson said some of that money could also be needed for the new career-tech high school scheduled to be built in the upcoming year. The budgeted cost of the facility is $50 million. Construction costs, however, have increased in recent months and the bids for the center are expected to be higher, Wilson said.
“I do think that building’s going to cost substantially more than $50 million, so I do think it’s good to have a substantial reserve in place,” Wilson said.
He said system officials should have an estimate on costs for the new school and other upcoming expenses by the start of budget hearings on Aug. 31.
The board voted Tuesday to approve a $50 million bond issue for the new building. The 20-year bonds will be issued at an interest rate of 1.87 percent.
