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A local bill would change the way TVA tax money is distributed.

Some area educators are worried about proposed legislation that would use TVA money to create a local legislative office in Athens, form a grant fund the delegation would administer and divide TVA funds between cash-strapped city and county schools based on student population.

House Bill 483, and its companion Senate bill, would change the overall disbursement of the money the Tennessee Valley Authority gives Limestone County each year.

TVA pays counties where it supplies electrical power an annual allotment instead of paying taxes like businesses and industries. That early payment is called the “in-lieu-of-tax payment.”

Donna McDaniel, legislative committee chairwoman for Athens City Educators, said some city educators don’t oppose a more equitable disbursement of money between city and county schools. They oppose using future increases in TVA money — which would occur if TVA raised rates or added customers — to create, equip and staff a legislative office in Athens.

“This is simply not wise use of this money at a time when we have so many local services and agencies struggling to survive,” McDaniel told The News Courier. “Our legislators of the past managed without an office.”

(She specifically named former state Sen. Tommy Carter, former state Sen. Tom Butler and former state Rep. Henry White, who did not have offices locally other than their homes.)

State Sen. Bill Holtzclaw, R-Madison, who represents a portion of both Limestone and Madison counties, sponsored the initial Senate bill, SB-411, upon which HB-483 is based.

HB-483, was sponsored by state Rep. Dan Williams, R-Athens, who represents Athens and the northern half of Limestone County. He did not return a telephone call for comment Friday.

Before HB-483 could become a law, it would have to be approved by both the House and the Senate, and then returned to the House for approval and signed by the governor. The bill underwent a second reading in the House March 15. When McDaniel and other educators saw HB-483, they were alarmed — but for different reasons.

Modest local office

The proposed bill reserves future increases in the TVA fund to be used, in part, to create, equip, and staff a legislative office in Athens.

Two members of the local delegation say such an office would improve efficiency and improve communication with constituents by creating a one-stop shop for those seeking information or needing to voice concerns about local issues.

Holtzclaw said the purpose of a local office would be to represent people the best way possible.

“Limestone County was one of five counties in the state that grew at a rate greater than 25 percent in the past 10 years,” he said. “An explosion of growth is a good thing, but as legislators we need to serve those people. A county office would be for the people of Limestone County. They would have a person to go to — a single person — who would serve as a conduit for all the legislators for all of Limestone County, and we would run it as economically as we could.”

Holtzclaw pointed out that he and other local lawmakers don’t have staff members.

“I share a secretary in Montgomery with another senator and that other senator is wholly in Madison County,” he said. “I don’t have anyone designated in Limestone County; I am the representative. ”

Holtzclaw said Morgan, Madison and Jackson counties have legislative offices.

“What made me look at it was Limestone’s growth over the past 10 years,” he said. “If some believe it will be a lavish office, that won’t be the case. We are not looking at doing anything like that. We want to create a one-stop shop for the community.”

State Rep. Mac McCutcheon, R-Capshaw, who co-sponsored the House bill along with state Rep. Micky Hammon, R-Decatur, agreed the office is a good idea.

“Many times we may have Senate or House districts that overlap, and people are trying to call Montgomery or call our cells and they are calling us individually,” McCutcheon said. “If we have one central point with someone there to answer calls, it makes us more effective to meet the needs of the people,” he said. “It would be a point of contact for the community and a point of assistance for the community. It would also serve as a center point for us to work from when working with people for economic development.”

For some, however, the problem with a local office is not its creation but its creation using TVA funds.

Grant fund

Part of any future increase in the TVA funds for Limestone would also be used to provide grants for economic development, education and other needs in the county.  According to the bill, the grants would be determined by the delegation based on the needs of the county. 

Some educators would rather have future increases in TVA monies be disbursed to schools and other entities that already receive a cut rather than used to create an office and a grant fund controlled by the delegation.

Holtzclaw said the grants would benefit more of Limestone County. For example, he said, after the March 2 tornadoes, Limestone did not sustain enough damage to meet the threshold required by the Federal Emergency Management Agency for cleanup assistance.

“The County Commission elected to not do tornado cleanup, but we had some money to do vegetation cleanup,” Holtzclaw said. We went to the county and asked how we could help.”

He said this is just one of many ways the grant fund could help county residents. An additional way will be fulfilling city and county needs. For example, if a school is damaged by a future storm, the grant fund could be used to assist in repairing it, he said.

McCutcheon said that while some of the TVA funds would go toward an office and the grant fund, it will not take away from the money schools receive now.

“We would not be doing it if we did not have the money to sustain education,” McCutcheon said.

He added that while the grant fund and the legislative office would use any future TVA increase, the public would benefit and help lawmakers address issues at the schools.

Equity funding for schools 

The portion of the bill that deals with school funding is designed to make TVA funding for the school systems more equitable. In addition to have about 9,000 students in county schools versus about 3,000 students in city schools, most of the population growth in the county in the last decade has occurred in the county, particularly the eastern portion. That trend is expected to continue. Holtzclaw said his aim in sponsoring the legislation was, in part, to make the disbursement of money more equitable based on student population.

McCutcheon agreed.

“At end of the day, we want the (TVA) money to fall to the kids,” McCutcheon said.

Other tax is handled equitably. For example, the state mandates that the county and city split ad valorem tax, with 76 percent going to the county and 24 percent going to the city. When the Madison school opens in 2013, it will receive a portion of Limestone’s ad valorem tax, but nobody knows yet how much. A judge may have to decide if school officials can’t reach agreement.

When city school officials learned of the bill’s content regarding some gradual loss of funding, they had questions and concerns.

Holtzclaw agreed there was some initial alarm over the bill but he said city schools officials discussed the bill with him and others last week. Now they will speak with county schools officials to see it they can work out a more workable disbursement of the funds. If so, the bill would be altered to reflect the desired changes.

Limestone more, Athens less

HB-483 specifically calls for increasing the county schools’ share of the TVA money by 1 percent each year beginning in 2013, and lowering the city schools’ share by 1 percent the same year.

In 2014, the county schools would receive another 1 percent increase and the city schools another 1 percent decrease. Beginning in 2015, the percentages for city and county schools would be determined annually by the County Commission, based on school population.

Initially, city school officials had a problem with the bill not because it called for more equitable disbursement but because of the impact of losing 1 percent each year at a time when school systems statewide are already strapped following three years of state cuts in education. They are also worried about other pending legislation that, if passed into law, could force deeper cuts at the worst possible time for schools.

County schools officials, on the other hand, would be glad to have a greater share of the fund. However, they are worried about the wording of the bill where it addresses the year 2015. Some believe it does not spell out that the TVA money for county schools should be used only for students actually living in the county. Their fear is that when the new Madison school is build in a Madison-annexed portion of Limestone County, the new school would receive a cut of the TVA money based on the school’s entire population rather than on the 40 or so students from Limestone who will attend it.

Limestone County school board members called a meeting on tax appropriations Friday morning then convened a closed-door meeting to discuss possible litigation. However, when they returned to the meeting room at the Central Office, on the advice of the board’s attorney no member would disclose whether that possible lawsuit might involve the distribution of TVA funds.

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