APS Considers Millage Rollback as Part of Reassessment Solution

As I wrote in my blog “Clarification of Our Millage Rate Adoption Process and Call for Reasonable Stop Gap for Your Property Taxes” last week, the Atlanta Board of Education earlier this month approved an FY2018 budget based on 6% growth projections in the Fulton County Tax Digest as provided by the Interim Chief Tax Assessor.

As a school district in a growing city, APS has been working to keep up with mandatory pressures – the state’s increase to teachers’ base salary scale, pension and retirement obligations and rising health care costs among them. The projected 6% growth in local revenue pays for those mandatory obligations.

Our first priority is our kids. Our mission is to prepare each one for college and career, and help make them good citizens along the way. Every decision we make is based upon that ideal, and we make those decisions in a fiscally responsive and prudent fashion.

Understandably, the reassessments left many residents in a difficult position as the digest may show double-digit growth with individual property reassessments ranging widely from 1 percent increases to over 100 percent. At 12:30 p.m., Thursday, June 15, the County Board of Assessors plans to consider solutions for the reassessments including freezing property values to 2016 tax values.

While we understand the impact that reassessments could have on our communities, we must also consider the damage deep cuts will have on our schools and the education of our students, especially at this late stage in the budget and hiring process. As we explained in a letter to Fulton County Attorney Patrise Perkins-Hooker, we believe the county needs to find a more balanced, more measured and more reasonable approach that provides at least the 6% increase in the digest as projected. To help reach that solution, APS will consider a millage rollback to ease taxpayer pressures.

Here is the letter we sent to Ms. Perkins-Hooker:

Dear Ms. Perkins-Hooker,

Our School District has been asked by Fulton County Senior Attorney, Ms. Cheryl Ringer, to assess the very real budgetary strains on Atlanta Public Schools based on conversations held at the June 8, 2017, Special Called Board of Assessors (BOA) meeting.

Our first priority is our kids.  Our mission is to prepare each one for college and career, and help make them good citizens along the way.  Every decision we make is based upon that ideal.

Atlanta Public Schools understands that the released assessments have left the families of the city of Atlanta and Atlanta Public Schools in a difficult position. We are appreciative that you are allowing us to weigh in as the decision could have a significant impact on district operations for FY2018.  We understand and appreciate the need for property assessments to be correct and we have a deep appreciation for the impact that these new assessments have on the citizens all across the city. To that end, we believe a more balanced approach is necessary to address this issue in a way that protects the interests of our students, their families and our communities.

Specifically, it was requested that we respond to the following questions:  1) The impact of delaying the digest for additional review and 2) The impact of freezing the digest at the 2016 amount.

First, we were asked to determine the impact of delaying release of the tax digest until further assessments and review were carried out.  With a delay of the digest until July, APS would need to issue a tax anticipation note (TAN) for the second year in a row in order in meet cash obligations beginning in September.  We will be forced to budget for interest, related to the TAN borrowing.  Last year this unplanned expenditure amounted to $148,000 in net interest on a $60 million borrowing. Additionally, if the release date of the tax digest and subsequent late property tax billing is pushed even further off schedule, APS would be placed at real risk of not being able to meet the Georgia Constitutional requirement that short-term loans such as a TAN be repaid by December 31 of the calendar year in which the TAN was issued.

Secondly, based on the range of 5%-7% provided by the Fulton County Interim Chief Appraiser, APS adopted a FY2018 budget that assumed an increase in Fulton County assessed values of 6%.  This was within the range provided and seemed conservative based on growth and reassessments from other local counties.  Freezing assessments would mean that APS would lose the anticipated $24 million in assumed increased revenue.  This $24 million was budgeted for FY 2018 to meet mandatory cost increases for the Teacher Retirement System (TRS) ($8 million), classified health rates ($1.3 million), scaling of charter schools ($4 million), City of Atlanta pension ($1.5 million), scaling up of system strategic initiatives in support of the charter system model ($3 million), and a 1.5% COLA for all employees in support of the Governor’s/General Assembly’s increase to the teachers’ base salary scale ($6 million). As a note, state revenue allotted to the District to fund the salary increase and the increase in TRS was more than cancelled out by a dramatic increase in the state’s withholding for local fair share meaning that the local revenue picked up the cost of the increases.  The District has very limited opportunity to raise additional funds by other means and depends on the local digest for 70% of all revenue of the general fund.

With more than 70% of our budget in salary and benefits, and with contracts already issued for teachers and other certified staff, we have limited responses: furlough days, cutting contracts days, reinstating austerity cuts to schools, freezing hiring of teachers (leaving hundreds of classroom vacancies for start of school year), cutting non-instructional staff including paraprofessionals, custodians, food-service workers, etc. (those without contracts), and reneging on the Governor’s and General Assembly’s increase to the teacher’s base salary increase.  None of these are good options, as you can see.

Finally, if the digest is both delayed and then frozen, the issues above are compounded and many of the aforementioned strategies and solutions are no longer viable and are off the table leaving us with only draconian and destabilizing methods of cutting.

Therefore, we request that you consider other options to a freeze including capping the assessments at a certain amount, phase-in the new assessments over a period of time and allow municipalities and school districts to contemplate rolling back millage rates, which Atlanta Public Schools is prepared to consider.  Without knowing the amount of the increases due to new growth, reassessments, corporate, or residential, we cannot fully cost out what even a partial freeze of the digest could mean for our district.  We need a reasonable stop-gap that includes revenue growth to provide critical public education services to more than 50,000 students in Atlanta.

In conclusion, we again thank you for taking the time to review our feedback and appreciate the consideration of our recommendation for a balanced approach that provides at least the 6% increase in the digest on which  our FY2018 budget was approved.  We look forward to working with you to find a solution for the families of Atlanta and the students of APS.

Regards,

School Board Chair, Courtney English
Superintendent, Dr. Meria J. Carstarphen
Budget Commission Chair,  School Board Member At-Large, Jason Esteves