Livingston — The Livingston Parish School Board on Thursday took a symbolic stand against proposals to reduce or eliminate the Louisiana inventory tax.
The school system stands to lose $1.1 million in revenue if the tax is repealed, according to a resolution the board passed unanimously Thursday urging state politicians to maintain the tax rate.
The school system’s $193 million general fund already operates on slim margins and is expected to run a $1.4 million deficit in fiscal year 2015.
School leaders say they depend on the inventory tax revenue, though local residents pay more into a state subsidy program than is returned through a Louisiana incentives program.
The inventory tax allows local governments to collect taxes on unsold goods. The state then reimburses the businesses the amount paid for the tax. Faced with a $1.6 billion budget shortfall, Louisiana politicians are eyeing the inventory tax as a way to cut costs, either by winnowing reimbursements or rolling back the tax altogether.
The School Board resolution implies that if the school district loses inventory tax revenue, teaching positions could be affected.
“A repeal or reduction to the inventory tax revenue received by the Livingston Parish School Board would make it virtually impossible to maintain the pupil/teacher ratio currently enjoyed and at the heart of success and efficiency of the system,” the resolution states.
School Board President Malcolm Sibley explained that if the tax is discontinued, schools may have to leave positions unfilled when a teacher retires or cut costs by hiring fewer teachers than they would normally bring aboard to handle increasing enrollment.
“There are many cuts the state could still take before going to local education,” he said.
The structure of the tax incentive program means that, once everyone gets paid, the state ends up losing money, businesses break even and parish governments come out ahead. But an analysis by The Advocate shows that some residents, such as those in Livingston Parish, aren’t getting their money’s worth.
Louisiana residents pay, on average, $95 a year to support rebates for the inventory taxes. The government in St. James receives the most money back per capita through the incentives program, approximately $1,115 per resident per year. The government in Livingston earns back $23 per resident per year. Essentially, while the school system earns money from the tax, the associated incentive program means Livingston residents are subsidizing the governments of industrial parishes.
The School Board’s resolution does not make mention of the state’s recompensation program associated with the inventory tax.
Superintendant John Watson was measured in his assessment of the distribution.
“There are some overall inequities … in the state subsidy programs,” he said.
Board Vice President Buddy Mincey, who requested the resolution, said he doesn’t want the state to cut into Livingston’s school revenue, already the lowest in the state in per-pupil funding.
“We’re struggling to get by with what we have,” he said. “Our emphasis is for us not to have any more cuts to our school system.”
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