A hold up in sending out Fulton County tax bills has Atlanta Public Schools officials scrambling to figure out how to pay the school system’s bills.
Staff furloughs and other cost cutting measures are not out of the question, APS said in a press release.
The Atlanta Journal Constitution reports that the state rejected Fulton County’s Tax digest, leading to the current predicament. According to Reporter Newspapers, “The state rejected the tax digest, saying it is ‘questionable’ whether the Fulton County Board of Assessors had the legal authority to freeze the property assessments at 2016 values, which the Board of Commissioners voted to do after residents expressed concern and anger over assessment increases.”
APS says it is taking legal action to force the temporary collection of taxes. The delay in collections prompted the school district to take a $100 million loan that will cost the district $470,000 in interest and fees. APS says 62.5 percent of general fund revenue comes from Fulton County property tax collections.
Another thing the district is doing to cut down on costs is waiting to make payments on contracted services until right before the bill is due.
There’s a hearing on the temporary collection order on Nov. 3.
“I am hopeful that we will hear positive news from the courts this week and that our operations will not be significantly impacted,” Superintendent Meria Carstarphen said in the press release. “In an abundance of caution, however, we are developing a contingency plan that could include implementing furlough days for some or all employees, delaying the $500 one-time payment until January for employees not on the teacher salary scale and identifying ways to delay repayment of the district’s TAN in the event that we are unsuccessful in convincing the courts to intervene.”
Here is the full press release from APS:
Atlanta Public Schools Files Temporary Collection Order to Intervene in Tax Matter
ATLANTA – Atlanta Public Schools is taking legal action for the immediate and temporary collection of taxes for 2017. On Friday, October 26, 2017, Atlanta Public Schools and Fulton County Schools officially filed this request for the courts to intervene in this process to allow the district to collect property taxes following recent news from the Board of Commissioners of Fulton County that the Department of Revenue did not approve the submitted 2017 tax digest.
Earlier this summer, the Fulton County Commission decided to freeze a portion of the tax digest for reassessed residential properties at 2016 levels. Based on that decision, the district modified the APS FY2018 general fund operating budget to adjust our revenues to be $4 million less than what was originally planned. Also, because of the initial delay caused by the decision of the Fulton County Commission, the Fulton County Tax Assessor had to recalculate property assessments and property notices had to be resent, delaying the typical process by more than two months. This delay caused the district to need to seek a $100 million Tax Anticipation Note (TAN) with a real cost to the district of more than $470,000 in interest and fees. A Tax Anticipation Note (TAN) is a short-term loan issued by states or municipalities to finance current operations before tax revenues are received.
The current delay in approval has major implications for the district and other municipalities that are dependent on the timely collection of tax revenue for operations. APS, like other school districts in Georgia, is highly dependent on local tax collections, with about 62.5% of general fund revenue coming from the Fulton County Tax Digest. As our fiscal year runs from July to June, APS is four months into the year without receiving the revenue or cash payment from the Fulton County Tax Digest.
Over the past few days the district reviewed several options to address short-term cash flow issues. For example, the district plans to take precautionary measures to slow down outgoing cash payments by modifying payment schedules for contracted services, goods and obligations as appropriate to minimize impact to daily operations. “This means that we will delay payments for goods and services until right before the bill is due,” said Lisa Bracken, Chief Financial Officer. “We need to carefully monitor our cash flows until revenues from the tax digest start coming in.”
The hearing date for the Temporary Collection Order is scheduled for November 3, 2017. “I am hopeful that we will hear positive news from the courts this week and that our operations will not be significantly impacted,” said Meria Carstarphen, Superintendent. “In an abundance of caution, however, we are developing a contingency plan that could include implementing furlough days for some or all employees, delaying the $500 one-time payment until January for employees not on the teacher salary scale and identifying ways to delay repayment of the district’s TAN in the event that we are unsuccessful in convincing the courts to intervene.”