Local News

May 7, 2013

Whitfield schools could get $6M budget boost

ESPLOST funding catching up after major retailer ‘mistake’

After several years marked by deep budget cuts, Whitfield County Schools officials could breathe a small sigh of relief soon.

Maybe as much as $6 million in relief to a $94 million budget, said Ron Hale, chief financial officer for the school system.

The state budget bill (House Bill 106), which is awaiting the governor’s signature, is expected to return some funding to school systems across the state beginning July 1, the beginning of the next fiscal year. The bill is expected to be approved by Gov. Nathan Deal as early as this week, said Rep. Tom Dickson, R-Cohutta. Hale said the main spending increase the bill proposes is fully restoring the equalization funding formula, expected to be $3.5 million for the county school system.

“Equalization has been in existence since the mid-1980s,” Dickson said. “We are looking at fully funding equalization as it is currently configured (it has been cut since 2008). In his state address, the governor was positive. His budget recommendation was full funding of equalization.”

State officials use the equalization formula to compare an individual school system’s property tax revenue to the state average. If the system’s intake is less than the state average the state makes up the difference to “level the playing field,” Dickson said.

The $3.5 million is in addition to $1.8 million in restored regular funding and $650,000 in additional funding, also included in the bill. All that equals the $6 million prospect; all that means “good news for the budget,” Hale said.

But it’s not the only good news.

Hale reported that the education Special Purpose Local Option Sales Tax (ESPLOST), which began collections in January, has shown life after a sluggish start. The school system reported $1.03 million in collections for March and $1.04 million in April. The expected year-to-date tax intake was projected to be $3.7 million by April. It’s now slightly above that at $3.77 million.

For January the school system reported $745,581 in collections of an expected $940,000. But all numbers to this point could be wrong, said Clint Mueller, legislative director of the Association County Commissioners of Georgia. Mueller is heavily involved with state taxes like ESPLOST and often works with the members of the state General Assembly.

“What we’ve heard from the (state) Department of Revenue is that there was a major retailer that made a mistake on their taxes at the beginning of the year,” Mueller said. “Because of the mistake, the revenue was delayed to local governments all across the state. It was someone big, a Walmart- or Target-sized retailer. They won’t tell us who.”

The revenue that was supposed to go into January’s receipts will roll into the following months, which means the $1.03 million in March and $1.04 million in April are bloated numbers, Mueller said. The month-to-month average on what ESPLOST is actually generating won’t be known for several months.

“We’ll have to watch and monitor the situation for now,” he said.

Hale said school officials are doing the same as they prepare for their 2013-2014 budget. The first budget hearing is set for Monday, June 3, at 6:30 p.m. School board meetings are held at the central office at 1306 S. Thornton Ave.

It is unclear how the $6 million could impact budget decisions like an increase or decrease to property taxes, Hale said.

School board members voted on Sept. 28, 2012, to raise the property tax rate from 14.756 mills to 18.756 mills, nearing a 20-mill cap to keep the system afloat financially.

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