Local News

June 20, 2013

County school system surviving on state funding

Tax rate likely to remain same as board approves budget

Whitfield County Schools is likely to be able to stay financially afloat for at least a few more years and avoid “the massive burden of making budget cuts” thanks to an additional $6 million in state funding, says Chief Financial Officer Ron Hale.

School board members unanimously approved their 2014 general budget Wednesday morning with little comment as a result. The budget will go into effect July 1, the start of the new fiscal year. The school system’s tax rate is likely to stay the same, depending on the health of local property values which are set to be reviewed later this year.

Gov. Nathan Deal and state legislators said in May they will fully fund equalization for the 2014 fiscal year. Equalization sends money to poorer school districts like Whitfield County to even out state funding.

A budget summary provided by the school system estimates $99.5 million in revenue — $27.6 million from local property taxes and $71.9 million from state funding — and $100.3 million in costs. The fiscal year 2013 approved general budget had $94.04 million in revenues and $97.69 million in expenditures.

An expected $842,000 shortfall for 2014 will come out of a $9.4 million reserve fund, school officials said. That’s up from an $800,000 difference school officials expected earlier this month and includes some maintenance projects at Antioch Elementary School that were unfinished last year, Hale said.

“Overall it’s a night and day difference,” he said of the restored state funding. “This is not ‘We have all this money. What do we do with it?’ It just fills the $5 million hole we were expecting to be in.”

Equalization should carry over to next year unless state legislators decide they can’t or won’t fully fund it, Hale said. They haven’t fully funded their per student formula (Quality Basic Education), where most state funding comes from, for years.

If $6 million is there next year that means the cut-or-go-bankrupt situation school officials thought they were in won’t manifest even as costs are expected to continue to go up next year.

If the school system didn’t receive the restored funding, board members were expected to decide on either raising the property tax rate for the second year in a row or laying off several people, including teachers, to stave off bankruptcy.

School board members voted last September to raise the tax rate from 14.756 mills to 18.756 mills, nearing a 20-mill cap. They defended their decision as a way to avoid layoffs. Salaries account for 85 percent of the budget, Hale said.

“We approved last year’s 4-mill increase, even though we wanted five, to have the lowest impact on taxpayers,” he said. “We did that with an expectation that it would almost have to be raised (to 19.756) this year.”

If school board members decide to move for an increase in the tax rate they are required by state law to hold three public hearings to get feedback from members in the community before a vote. Last year brought heated criticism of school board members with several county taxpayers condemning the increase. There was no public comment at two school board meetings where the proposed budget was discussed this month.

Even though the budget doesn’t include a tax rate increase there is potential for more budget hearings, Hale said. If the tax digest — the value of all homes, cars and other taxed property within the county — increases, tax revenues would potentially increase, even if the tax rate stayed the same. School board members would then have to decide on either rolling back the tax rate or leaving the rate where it is and bringing in more revenue. In the case of more revenue, three public hearings would be held.

Hale said in that scenario he’d probably tell the board members to keep the rate where it is because tax rate rollbacks under previous school boards left the system struggling for money.

Several board members have said they don’t foresee lowering the rate until teacher salaries are back to normal. They’ve been cut for several years through furloughs as a result of cuts in state funding.

Hale said he anticipated a flat digest when he drafted the budget that was approved. A tax digest report comes out of the Whitfield County Tax Commissioner’s Office annually and won’t be public until August.

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