School board asks for vote on new tax
By Dwight Otwell Editor

The school board will try to influence the board of commissioners to provide the entire amount of funds from Medicaid relief for school construction.

The Cherokee County School Board Thursday voted to request that the county commissioners hold a referendum, possibly in the fall of 2008, to approve either a 1/4 cent sales tax or a .4% land transfer tax to be used for school construction.

At the monthly school board meeting at Marble Elementary School, the board began to formulate a plan that would provide for a continuous stream of revenue for much needed school construction. The school board and county commissioners met yesterday morning (Tuesday) to discuss funding for school construction.

The General Assembly voted this year to phase out counties' share of Medicaid over three years. Counties are guaranteed at least $500,000 the first year. That amount is expected to increase as the state takes over 25 percent of the Medicaid burden from counties the first year, 50 percent the second year and then 100 percent.

Also, the General Assembly authorized counties to levy an additional 1/4 cent sales tax or an additional .4 percent additional tax on land transfers. However, the county commissioners must approve the tax and the voters must pass it in a referendum. The county can levy only one of the taxes.

Director of Governmental Regulations for the state Board of Education Leanne Winner wrote a memorandum in which she states, "While not spelled out in the legislation, the General Assembly intended that a large portion of the gains through both the Medicaid swap and the new revenues be used for school construction. This has created a great opportunity statewide for schools to receive a significant and constant resource for school construction."

The North Carolina Association of County Commissioners estimated that a .4 land transfer tax would bring in an additional $1,691,628 to Cherokee County and a 1/4 cent sales tax would bring in an additional $845,047 to the county.

Cherokee County School official Terelle Beaver said $1 million in revenue a year would finance $11 million in construction based on a 15-year loan at 4.5 percent interest.

The board also voted unanimously to ask the county commissioners to dedicate all of the proceeds from Medicaid relief, this year and in the future, to the school system for construction.

The school board also voted to engage two resources to do long range planning for Cherokee County school construction. The motion is to approve ORED lab-NC State University to do master planning at a cost of up to $27,500 or for Barge, Waggoner, Sumner & Cannon to provide some master planning if they will do a free facility assessment. The board decided to ask the county commissioners to fund the cost of the planning. However, the school board agreed that even if the commissioners don't fund the planning, the school system would use money from its fund balance for that purpose. Planning would take three to four months, Beaver said.

Beaver noted that Medicaid relief will become effective October 1 and there will probably be a quarterly distribution going to the county. The funds will begin coming to the county this fiscal year. The minimum of $500,000 this year isn't in the county's budget so it is a windfall.

Beaver said she believes the legislation providing for Medicaid relief is specific enough that the county could borrow against the anticipated revenues.

"I don't think this will come into play before the next fiscal year," she said.

The county's fiscal year begins July 1. Beaver said County Manager David Badger has said a referendum on one of the taxes cold be held as early as May 2008.

The board also approved a letter written by Beaver which asks the county commissioners to commit funds to build additional classrooms at overcrowded Ranger School.