COVERT — Deeper cuts to Covert Public Schools’ 2019-20 budget are needed than previously anticipated, school board trustees learned Monday.
Superintendent Bobbi Morehead said the district will have to cut $1.8 million from next year’s budget instead of the estimated $1 million that was discussed at April’s school board meeting.
The increase is due to one of six properties that is part of the Palisades Nuclear Power Plant being reclassified to school tax-exempt status. The plant is scheduled to close in 2022 and has been receiving reductions in property valuations from Van Buren County.
In April, Van Buren County Equalization Director Anthony Meyaard told county commissioners that he had reduced Palisades’ plant’s valuation by 25 percent this year and planned to reduce it another 25 percent next tax year, for a loss of $8-$10 million in property tax revenue to the county and other taxing units, including Covert Public Schools.
The current owner of Palisades, Entergy, will leave and another company will take over to decommission the plant once it closes.
Meyaard said that the value of the property is dependent on what someone is willing to pay for it. With the pending closure, it becomes less valuable to investors. When Palisades actually closes, the nuclear plant will become in essence valueless.
The district had been anticipating the revenue reduction after the plant closing was announced, but Morehead said that large of an amount was not allocated for.
“We’re going have to cut even deeper and look at ways to do this safely,” she said. Staff retirements, job absorption and refinancing of existing bond debts will all be considered.
In other matters, the trustees learned the high school gym, which is in bad shape due to roof leaks and other problems, is going to have to be replaced instead of refurbished as originally thought. The estimated cost is $153,00 to $168,630. An insurance claim has been filed but no decision has been made yet whether the claim will be accepted.