Q May a school district, consistent with Article 8, Section 206 of the Mississippi Constitution, annually make “non-refundable loans” to other public school districts in the county, with the loan originating from funds received as a result of fees-in-lieu of ad valorem taxes received from large industrial projects?

A No, there is no statutory authority for a school district to donate a portion of its share of fees in lieu of ad valorem taxes to another school district located in the same county. To do so would constitute an unlawful donation in violation of Section 66 of the Mississippi Constitution, even if the “lender,” of the “non-refundable loans” retains a sufficient portion of the fees-in-lieu in order to fully fund annual operating and capital improvements budgets. A school district should not have a surplus of funds available each year to donate to another school district in the county. If a school district will annually have surplus funds due to the pro rata share of fees it will receive in lieu of ad valorem taxes, the school district’s request in dollars to the board of supervisors should be adjusted down so that the school district will only receive a total amount from the county that will support the school district. (Attorney General’s Opinion to Rodolfich, March 24, 2017)