By Rupert Howell

South Panola School trustees replaced a funding request, taking shortfall notes to replace delinquent tax payments by LSP Energy off of the ad valorem tax request worksheet to be presented to Panola County supervisors during upcoming budget meetings at the request of Superintendent Keith Shaffer.

Trustees had discussed whether or not to include additional tax shortfall notes during June budget meetings and left options open for change if taxes in arrears would be paid during the current school year.
LSP Energy filed for bankruptcy last February while owing Panola County approximately $3.6 million in taxes, approximately one-half of that designated for South Panola School District.

Trustees had the option of waiting to see if taxes will be paid for 2011 and 2012, or asking Panola County to issue tax shortfall notes to cover the shortfall. The taxes for 2012 will be due and payable in January and it is unclear if 2012 taxes will total the previous year’s or a pro-rated share if the new owner takes possession prior to the end of the calendar year.

The apparent bid winner, South Mississippi Electric Power Association, is exempt from both county and school taxes, but taxes in arrears and current tax payments are expected to be paid when the U.S. Bankruptcy court sale is finalized.

The tax shortfall notes would need to have raised $600,000 per year for three years for the 2011 taxes.

The current budget request stands at $10,029,914 for operations and an additional $1,050,000 for general obligation bonds, notes and previous shortfalls totaling $11,079,000 in local taxes for South Panola Schools.

A September 20 sale date has been set by the federal bankruptcy judge for LSP, but trustee board president Sandra Darby, who is affiliated the the local power producing entity, stated Tuesday that payment may not be  made until later in 2013.  

She told fellow trustees that LSP Energy is hoping, “… to close by November 30, April 30 at the latest.”