The only good thing about the 20-percent electric-rate hike enacted by the Tennessee Valley Authority is what it will do for road building and local governments.
But will the increase help local schools?
Athens City Schools Superintendent Dr. Orman Bridges Jr. said he does not believe city schools will receive additional money because of the TVA rate increase due to a local act passed in 2008.
“I think the legislation basically froze the amount we receive,” he said.
Under a local act passed by the state Legislature in 2008, Limestone County – beginning in fiscal 2008 – first deducts $293,000 and then distributes the rest of the TVA money as follows: Limestone County general fund, 3 percent; Limestone County public building fund, 10 percent; special hospital tax fund, 5 percent; countywide schools fund, 23.5 percent; Limestone school district, 9 percent; Athens school district, 6 percent; City of Athens, 20 percent; City of Ardmore, 1 percent; City of Elkmont, .38 percent; City of Mooresville, .06 percent; and City of Lester, .06 percent.
Before that, the county did not first deduct money and divide the rest by percentage.
The 2008 legislation also states that beginning in fiscal 2008, the 3 percent increase in the in-lieu-of-taxes payments to counties served by TVA shall be distributed to the County Commission to be used for economic development, public service and community projects in the county.
It does not address additional money generated due to rate increases.
Power customers are seeing the largest electric-rate hike in three decades on their November bills because of the TVA rate hike that went into effect Oct. 1. The nation’s largest public utility does not pay income or property tax. Instead, under the TVA Act, it pays 5 percent of its revenue to state and local governments in its territory.
In fiscal 2008, the county received $7,230,997 from TVA, according to a county accountant Emily Ezzell. She said the schools would get their percentage of whatever the county receives.
“If we get a dollar increase then it will be distributed according to the act – they would get their percentage of the higher amount.”
Whatever city schools receive, Bridges said it would be put in the general fund and be used for salaries and other expenses.
Jonathan Craft, chief school finance officer for Limestone County Schools, could not yet estimate Wednesday how much money Limestone schools will receive from TVA but he said whatever the amount, half will be put in the reserve fund and half will be used to balance the fiscal 2009 budget.
In fiscal 2009, TVA expects to pay $495 million in lieu of taxes to state and local governments, up from $455 million last year, according to the Associated Press. Depending upon what rates and power sales do in the next year, TVA could boost such tax-equivalent payments to nearly $600 million by 2010, the AP said.
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