No tax increase will be necessary to cover a projected $1.7 million shortfall for the county schools, officials say.

Superintendent of Education Michael D. Kent said that despite the shortfall, which comes from a lack of expected ad valorem tax collections, the district will be able to work around the problem.

County Tax Assessor, Gerald Barber, meanwhile, said that the spending habits of county residents, along with high gas prices, could be driving down ad valorem tax collections on new cars.

"You've got to be buying a lot of new cars and trucks to keep that growth going - you're fighting depreciation all the time," said Barber, who added that new car sales alone represented an "unstable tax base."

He said that other important considerations may be affecting what people decide they can spend on cars, such as increasing gas prices and other larger financial obligations.

"Vehicles have gotten to be major purchases. A lot of our citizens are probably strung out on some pretty big house payments," said Barber. "Here's the Madison County dream: you've got a $500,000 house, and Momma is driving a brand-new Suburban that's 50 feet long making soccer runs, and Daddy is driving a high-end luxury car, and they're working two jobs to do it."

A trend towards cheaper and used vehicles may also have caused the tax shortage, an automobile dealer said.

But regardless of the cause, Superintendent of Schools Michael D. Kent said that the district will not dip deeper into taxpayers' wallets.

"We could raise taxes and come up with $1.7 million," Kent said at the end of a school board meeting on Monday. "But we're not going to do that."

District Finance Director Debbie Jones said that the shortfall would not have any direct effect on the district's ability to meet its normal financial obligations.

"We have already projected this shortfall into next year's budget," said Jones.

She said that the district still had this month and June to collect additional ad valorem taxes, although collections are typically low during those months.

The school district's fiscal year ends on June 30, unlike county government, whose fiscal year ends on Sept. 30.

The shortfall came to light at the May 7 meeting of the county School Board, where Finance Director Debbie Jones announced that the district had fallen short of the projected $42 million in ad valorem revenues for this budget year.

The $1.7 million would normally have gone into a contingency fund and could have been used to supplement spending on the elementary school planned to open in the Mannsdale area at the start of the 2009 school year.

But Kent said that since the district had decided to make the Mannsdale school an elementary school, not a K-8 school, the school's estimated cost has been dramatically lowered to approximately $9.75 million.

Previous projections put the new school's cost as high as $16 million.

This made the $1.7 million shortfall less critical, according to Kent, who said that "there's enough money on the tax rolls to support the school district's requests."

Kent said that since the school district requests a dollar amount from the county, and then the county sets what it believes to be an appropriate millage rate, it simply meant that the district had made too large a request, in hindsight.

"For this year, we would have asked for $1.7 million less," he said.

Jones said that she had spoken with Barber, Tax Collector Kay Pace, and other county officials about the problem and its possible causes.

On May 7, Jones told the school board that she believed the shortfall was largely due to sluggish automobile purchases by county residents. This past Monday, she stuck to her original analysis.

"After a thorough investigation ... the only explanation is that there has not been an increase in car tag (purchases)," said Jones.

She noted that there was also a shortfall in the district's ad valorem collections last year around the same time.

Barber, however, said that he isn't ready to say definitively that virtually the entire shortfall can be attributed to sluggish car sales.

While there is usually a 5 to 8 percent annual growth rate in new car tag sales, according to Barber, there have been recent years, such as 2001, when such growth did not occur.

As the county's assessed value steadily grows, Barber said that keeping those percentages at the same level is difficult, especially when it comes to new vehicles.

Last year the county's assessed value was approximately $1.1 billion.

Jarrett Caraway, a general sales manager at Patty Peck Honda in Ridgeland, said that while sales recently at his dealership have been good, there are certain patterns emerging that explain car tag shortfalls.

"There are a lot of different things that are going on to take car sales away from Madison County," said Caraway. "People are buying cheaper cars. People are buying more used cars instead of new cars."

While car sales in the state skyrocketed in the wake of Hurricane Katrina, Carraway said that about nine months ago, sales dropped so dramatically that it was "like someone turned the faucet off."

The number one question he gets in his dealership, he said, is about gas mileage and a car's fuel economy.

Despite these factors, Barber said he was confident that new upscale commercial properties, such as the kind being built along Highland Colony Parkway, would provide for strong and reliable growth in the tax base.

"I'd rather see that than a lot of rooftops without jobs and commerce," he said.