The Jackson City Council voted May 18 to direct its share of revenues it receives from a local option sales tax to the city’s general fund.

The Jackson City Council voted May 18 to direct its share of revenues it receives from a local option sales tax to the city’s general fund.

The revenues are the city’s share of a 1.25 cent increase in the local option sales tax that it has been donating to Madison County for Jackson-Madison County Schools since 1990.

The City Council has not defunded local schools. Instead, the council’s action has opened the door for discussion between the city and the county and school board about how any donation from the city can be used to help the schools. The council’s action was to exercise its right to control the use of the funds.

The city voluntarily started donating the money to Madison County for schools in 1990 after voters passed a referendum to merge the Jackson City and Madison County school systems. The original intent of the donation was to “level up” services between the City of Jackson and Madison County school systems as the two systems merged.

The city’s donation of $4 million in 1990 has grown to nearly $12 million for this fiscal year.  The county’s share of property taxes used for local schools started at $6 million in 1990, increased for a while, but is now back at $6 million. As the city’s gift and sales tax revenues for local schools have increased, the county has decreased its funding.

Meanwhile, the city needs to increase revenues to balance its own budget and to pay for a $62.6 million list of infrastructure improvements and repairs to streets, the storm water system and public venues. It is this investment in the city’s future that fuels the economic engine that produces sales tax revenue in the first place.

The city’s budget committee discussed several ways to meet the need for more revenues, includin a storm water use fee, a tax on fast food sales, property tax increase, a construction impact tax and employee layoffs.

It’s also important to understand that the City of Jackson is not abandoning its support of the Jackson-Madison County School System.  City residents, by far, pay the bulk of local funding for the school system through sales tax revenues and through their Madison County property taxes. In fact, 91.4 percent of the local tax money that funds the school system comes from Jackson City residents.

Local funding for the school system is from three main sources: (1) Half of all revenue from local sales taxes, as mandated by the state; (2) a portion of the Madison County property tax revenue; (3) the city’s gift to Madison County of its share of the 1.25 percent local option sales tax revenues.

Since 1990, state-mandated sales tax revenues for schools have increased from $9 million a year to $26 million. The city’s donation has increased from more than $4 million to nearly $12 million. The money from Madison County property taxes started at $6 million, peaked at $15 million in 2004, and is back at $6 million.

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