September 4, 2013

Spending on turf field questioned as Dalton school board talks tax

Members ‘leaning’ against increase this year, unsure about next

By Christopher Smith

— Weeks after the completion of an artificial turf field and running track at Dalton High School expected to cost about $1.35 million, paid for with taxpayer dollars, members of the Board of Education are set to decide whether to raise property taxes.

Board member Steve Williams, who is not seeking re-election, has said he does not support a tax rate increase this year. But several other board members have said an increase — if not this year — is seemingly inevitable given the slow economic recovery in the area.

Board members are expected to discuss the tax rate at their meeting on Monday at 6 p.m. at City Hall. Another meeting is expected later this month to approve the tax rate, but a date hasn’t been selected, city schools spokeswoman Pat Holloway said.

Board Chairman Danny Crutchfield said several members are “leaning” against a tax rate increase this year, adding that “at some point in time” an increase is likely.

Board member Richard Fromm said he doesn’t “anticipate a recommendation” from school system officials to increase the rate this year, but the same can’t be said for the next few years.

“(An increase) may be necessary in the future to be able to continue supporting our excellent educational system,” Fromm said. “We are constantly assessing and reassessing the funding for Dalton Public Schools.”

The rate is currently 7.845 mills, with a mill representing $1 for every $1,000 worth of property, including cars, homes and office space, among other high priced items. For a $100,000 home at that rate without any exemptions, the property tax is $784.50 annually. Theresa Perry, chief financial officer for the school system, told board members at their August meeting that an increase of 0.4 mills would bring in about $1 million.

Crutchfield said spending on the field was a “good decision” even though the economy has been down and school finances tight. Board member Mark Orr said “the track was in an unsafe condition and had to be replaced.”

Catamount home football games are played on Harmon Field south of Dalton High. That field is owned by the city. The new practice field and track, which sit next to Waugh Street, were not paid for through a 1 percent education Special Purpose Local Option Sales Tax (ESPLOST) like many other construction projects, but instead from out of the school system’s general budget.

Perry said school officials could have used ESPLOST money because the ballot measure that voters approved in July 2012 included “acquiring, constructing and equipping new school buildings and facilities, including but not limited to educational/athletic facilities ...”

But the first part of the sales tax money was already planned to be used to relocate Morris Innovative High School from its Morris Street location to Fort Hill in 2012 and to expand Dalton Middle School, she said. Renovations at Fort Hill cost $2.83 million, while Dalton Middle’s expansion is expected to cost approximately $10.7 million.

A year without sales tax; taking from the school budget

City school board members, along with members of the Whitfield County school board, voted in 2011 to delay the continuation of the education sales tax from 2012 to this year to be “sensitive to the constraints of the local taxpayer,” a school audit reported.

Had they not done so, ESPLOST revenue could have possibly paid for the new field and track — and then some. The sales tax typically brings in $5 million to $6 million annually for city schools — or about $400,000 to $500,000 monthly — according to a school report. Three months of the sales tax would have given board members another option besides dipping into the budget.

Perry said the cost for the field and track is being paid out of the system’s $59.68 million school budget. That budget also pays for teacher salaries, day-to-day operations and school programs, among other things. Most of the funding for that budget comes from state funding and local property tax revenue.

Not everyone has embraced the new field because of the use of taxpayer money, Orr said.

“I know the track and field is a hot button issue for some in our community,” he said, “especially when taxpayer money was used. I wish we had had an anonymous donor step forward to fund that project, as a couple of our neighbor systems did (close to $1 million was donated for a new field at Southeast Whitfield High School in the county). But we did not.”

The poor economy, high unemployment and Dalton Mayor David Pennington’s anti-tax stance were among the reasons board members chose to opt out of the sales tax for a year, Orr said.

Asked if city residents would have preferred a 1 percent sales tax to fund the new track and field instead of taking money for it out of an already tight budget, Orr said he couldn’t answer that.

“It’s a done deal now,” he said. “I have no regrets ... We didn’t think (the sales tax) would (pass) at that time. There was lots of opposition (in 2011). In 2012, there was not.”

Crutchfield said Orr’s views are “pretty consistent” with his.

“We’re going to continue to invest in our kids,” Crutchfield said of the new field. “The kids over there now would say it’s a good decision. And we’re very proud of it.”

Orr said there’s never an ideal situation “when the timing is just right to make such a large investment,” but  “the track was in an unsafe condition and had to be replaced.”

“It had been patched several times over the last several years,” he said.

Now the complex is “quite the showpiece” and will benefit the entire community, offering a place to practice football, soccer, band and track and also host Dalton Middle School sports, Orr said.

The money taken from the budget won’t be replaced by ESPLOST dollars. State law prohibits school officials from transferring sales tax revenue into their budget, even if it’s to retroactively pay for a project that would have fit within the parameters of the ballot measure approved by voters.

Fifty new teachers

The $1.35 million turf project began at about the same time the school system was hiring 50 new teachers to deal with an increasing student population. The number of students increased from approximately 6,330 in 2006 to more than 7,560 students this year, based on enrollment data provided by the school system.

The average salary for a teacher this year who has been in the system for 10 years is $51,714 a year. For entry-level teachers, the average salary is $32,817, while teachers who have been in the system for 20 years and have a doctorate degree make $74,107 annually. The salary information was provided by Perry.

Holloway said because students are the system’s “core business,” expenses are tied to enrollment. The more students, she said, the more teachers, more school supplies, more cafeteria workers and so on.

“Everything gets bigger when enrollment gets bigger,” she said. “It impacts everything.”

So why did board members approve a new practice field and track when they knew they had to hire 50 new teachers? After all, $1.35 million could perhaps have paid for a large number of the 50 new teachers.

With 640 instructional employees (teachers, parapros and literacy coaches, among others) to 7,560 students, Perry said each Dalton teacher has about 14 students per classroom. The state waived classroom limits in 2011 to help local school districts deal with lean budgets. Back when there was a limit in effect, classrooms were kept to about 20 students for elementary and middle schools and about 30 for high school classrooms.

“It’s a numbers game,” Crutchfield said. “We have hired a certain number of teachers to meet how many kids we have in class. We know you get better instruction with fewer kids in class.”

“In the 2007-2008 school year, the district had its highest per student expenditures of over $13,000,” Perry said. “In 2009 and 2010 per student expenditures dropped to $12,000. Then for the last three years we have been at our lowest level of $10,000 per student.”

The fact that per student spending is decreasing is important to note, Perry said, when residents question how school officials use taxpayers’ money.

As the cost per student has dropped, average salaries have increased and are expected to continue that way, Perry said. School board members have long said they want to restore cuts to teacher salaries incurred during the housing market crisis of 2008. Teachers are still paid approximately $4,000 less on average than they were then, according to information provided by the school system.

“Our challenge isn’t so much hiring new teachers,” Crutchfield said. “But it’s really about taking care of the teachers we have. That’s a challenge. We want to be able to keep the best teachers, to attract and retain them.

“We have to keep them in our system. We want to be competitive. We know it’s not all pay. It’s about the culture and kids. But compensation is important for all of us.”

Besides, Crutchfield said, saving $1.35 million this year would only pay for one year’s worth of the new teachers’ salaries.

Williams said even though he hopes salaries continue to improve, he is “not ready to raise the (tax) rate.”

“And I really haven’t seen anything that would change my mind,” he added.

Although several other board members say they are “leaning” against an increase this year, Crutchfield said “that doesn’t mean they can’t ever change” their minds. Orr said a good case can be made for a tax increase.

“We continue to grow 200 to 300 students per year and eventually the time will come when an increase is needed,” Orr, who is also leaving the board at the end of the year, said. “I certainly hope the board, moving forward, will gradually make those increases as opposed to waiting until they’re in dire straits and have to make a hefty increase.”

“Obviously, all sources of revenue need to be considered when building a budget,” Fromm said. “The recently approved budget projects greater expenses than the projected revenues will cover. The fund balance will cover the deficit (this year).”

The budget approved for the fiscal year that began July 1 by Crutchfield, Orr and Williams — Fromm and board member Tulley Johnson were absent from the meeting — assumed $59.68 million in revenues and $64.2 million in expenses. The fund balance — or what several school officials refer to as a “rainy day” fund — is covering the $4.52 million shortfall by taking it from some $10.6 million that has been set aside. Perry and several board members said the fund is likely to be further depleted as health benefits and insurance costs continue to go up for school employees.

“Our budget for this year consumes a good portion of that balance, as does the projected budget for next year,” Orr said. “Obviously, we can’t continue on that path and survive.”

So a tax increase is likely going to happen at some point, he said.

But when? And does the money spent for the turf field make a difference on how soon?

“At some point in time, obviously, we have to look at this,” Crutchfield said. “Are we going to do it next year? In two years? In three years? We can’t say for sure with a lot of confidence.”

“Look, we always have to evaluate the tax rate,” he said. “We do that constantly. But all board members agree it (an increase) is a last resort.”