August 13, 2013

Dalton school board won’t deny possibility of tax increase

‘Rainy day’ fund expected to lose $4.52M

By Christopher Smith
christophersmith@daltoncitizen.com

— At some point, the economic downturn’s impact on local schools has to be addressed, Danny Crutchfield, chairman of the Dalton Board of Education, said Monday night.

Theresa Perry, the city schools’ finance director, told board members at their meeting to prepare to talk about the possibility of raising property taxes.

School officials are expecting $59.68 million in revenue, mostly from property taxes and state funding, to cover $64.2 million in expenses during the 2014 fiscal year, which began July 1.

Perry said the school system is covering the $4.52 million shortfall by taking it out of the system’s $10.6 million “rainy day” fund.

The school system has been losing state funding since the housing market crashed in 2008 and will likely continue to deal with a strained budget for years to come, Perry said. That means the local property tax rate might eventually need to go up to keep the school system financially stable.

Tulley Johnson, who has served on the board for 14 years, said the city schools’ tax rate has only increased once. It sits at a $7.85 tax on every $1,000 of property, which includes cars, homes and business inventory, among other high-priced items.

Board members were reluctant to dispel the idea of a tax increase.

Crutchfield said the general “feeling” is that board members “are working really hard to make sure taxes don’t go up (this year).”

A tentative tax rate is expected to be set at a Monday, Sept. 9, board meeting at 6:30 p.m. at City Hall. If there is an increase in the amount of collected taxes, state law requires three public hearings to receive feedback from the community before a new tax rate is set.

Board members haven’t talked together at length, Crutchfield said, adding that nothing is “definite” until there’s an actual vote.

Board member Steve Williams, who said earlier this month he will not be running for re-election, said he’s “not at a point” to consider a tax rate increase.

“I’m not in favor of one,” he said. “Now, that’s based on the information, or lack thereof, I have now. But I’m not in favor of an increase. The fund balance is set aside for rainy days, which we’re heading into that direction.”

Other board members wouldn’t say which way they’re leaning.

“We can’t continue to spend $4 million we don’t have each year,” Mark Orr, who is also not seeking re-election in November, said. “Eventually something has got to kick in.”

Asked if that means a tax increase, Orr said he “didn’t know.”

Johnson said he will need to get “all the facts” before making a decision.

“Raising taxes is always a last resort,” he added.

Orr, Williams and Crutchfield voted to approve the budget in June that assumed the $4.52 million shortfall, but did not discuss the property tax rate then.

Perry said that’s because they were waiting to see the health of the tax digest, the value of all property that’s taxed within the county. Those numbers are expected to be released by the Whitfield County Tax Commissioner’s office sometime this month.

“You know, I’m thankful for this: There are districts around us that are getting hit harder than us,” Williams said. “We’re holding on. I’m thankful for that.”

Board member Richard Fromm was not at Monday night’s meeting.