The county gets $700,000 every year from a half-cent sales tax set aside by the state for school construction and maintenance. Of that, $440,000 goes toward debt on the elementary schools, which will be paid off in 2018. The fund also covered debt on the high school dating to a 1976 bond. That was finally paid off this year, freeing up money to cover debt on the land purchase.
The county only borrowed $2 million of the $3 million purchase. The county used $500,000 saved up in reserve, and the school system used $500,000 of a $1.3 million surplus that had accumulated in the half-cent sales tax fund.
Here’s what the future holds:
The county borrowed $2 million for the land with a 15-year loan. The annual payments start at $216,000, but decrease by $7,000 a year over the life of the loan. The $700,000 in the annual half-cent sales tax fund is more than enough to cover the land debt and the elementary school debt. Sales tax will increase and the debt on the land will decrease, so within a few years there will be about $100,000 a year freed up in the fund.
But even when coupled with lottery revenue — pegged at $140,000 a year — it won’t be enough to cover the construction costs on a new middle school. The county will have to take out a loan to cover the building costs, which will be $15 million minimum, officials say.
The county has only one outstanding debt coming out of its coffers currently: $480,000 a year for the new jail, sheriff’s office and dispatch center. Some of that will be subsidized, however, by holding federal inmates and inmates from Cherokee. how Swain County plans to pay for the school land purchase.