Now that the city, county and school district have passed their budgets for the coming year without a tax increase anywhere, we can all sit back and take a deep breath of relief.

Given the economic conditions for the past several months, governmental bodies everywhere have been scrambling to cover reductions in the revenue stream.

It seems everyone —individuals, businesses, industries and governments — is trying to cut expenses to offset the reduction in revenue brought on by the recession.

Everyone, that is, but the federal government. But that's another story for another time.

I think our LOCAL elected officials deserve a round of applause for being fiscally conservative during a time when any kind of tax increase would have dealt a devastating blow to their constituents.

The city and county have been relatively frugal in their budgets in the past several years, showing only modest increases over the past decade.

The school district's budget, on the other hand, has increased by 32 percent during that same period: $47 million in 1999 to $62 million this year.

Granted, some of that increase has been due to state and federal mandates. Salaries, which make up 85 percent of the budget, have increased significantly. These are valid reasons for the increases, so I'm not saying school boards in the past have been loose with taxpayers' money, but I believe they could have been a lot tighter.

For instance, student enrollment has increased minimally: about 8,547 in 1999 to 8,938 in 2008 or 4.6 percent. Aren't there some high-paying administrative jobs and support positions at the district office and in the schools that could have been eliminated or combined? A little saved here and a little saved there can add up to a big reduction in overall expenses.

I'm sure cuts were made to help balance this year's school budget, but the one thing in particular that stood out to me wasn't a cut.

It was a $2.9 million transfer from the one cent sales tax fund to the operational budget.

When I first read about that plan, I thought, "They can't do that. That money is to be used to pay back bonds sold to build Gaffney High School, three elementary schools and some other improvements."

In a 1994 referendum, voters approved the bonds and most of us thought the money raised by that tax could only be used to retire the bonds.

Apparently we were wrong.

According to Act 588 of 1994, "The Cherokee County Treasurer holding taxes collected pursuant to this act must certify to the auditor of the county on July fifteenth of each calendar year as to the amount of taxes held by that county treasurer as of June thirtieth of the calendar year. The Cherokee County Auditor shall reduce the next levy of ad valorem property taxes required to pay debt service on bonds to which the tax is applicable by the amount of tax revenues certified as collected as of June thirtieth by the county treasurer. Taxes collected as of June thirtieth of a calendar year in excess of the amounts required to pay debt service due in the eighteen months following June thirtieth on bonds to which the tax is applicable must be applied to reduce the next levy of ad valorem property taxes required for payment of operational and maintenance expenses of Cherokee County School District."

I'm no attorney, but the school district got an opinion on the matter from theirs. She said they could transfer funds from the account as long as there remained a sufficient balance to make bond payments for the next 18 months.

Now there is a bit of wiggling going here. Notice the exact terminology of Act 588: "... must be applied to reduce (my emphasis) the next levy of ad valorem property taxes required for payment of operational and maintenance expenses of Cherokee County School District."

The district isn't using the excess to reduce the tax levy, but rather avoid increasing it.

I have two questions about all this. 1) Was there an excess in previous years, and if so, why wasn't it used to DECREASE our taxes? 2) With a slow economy, it stands to reason that the one cent sales tax will not generate as much revenue as in past years. What happens if there isn't a sufficient amount to make bond payments come next June 30? I'm guessing here, but it would appear an increase in the debt service tax millage would be the answer.

The district is leaving $1 million in the excess fund, I suppose, to help cover any shortfall that could occur next year.

But doesn't ACT 588 say "taxes in excess...must be applied to reduce the next tax levy."?

It's all very confusing, so I'll quit trying to figure it out and take comfort in the fact that my taxes will not be going up this year.

Cody Sossamon (cody@gaffneyledger.com) is publisher of The Gaffney Ledger.