“So be sure when you step, Step with care and great tact. And remember that life’s A Great Balancing Act. And will you succeed? Yes! You will, indeed! (98 and ¾ percent guaranteed)”
— Dr. Seuss in Oh, The Places You’ll Go
(UPDATE – June 22, 2018) Today, the Atlanta Board of Education Budget Commission met to discuss the recommendation of Atlanta Public Schools administration to roll back the school millage rate by one mill, thereby providing tax relief for Atlanta homeowners. This action demonstrates the District’s continuing effort to honor its commitment to helping homeowners with tax relief and still supporting APS students. In total, APS has taken two specific actions: 1) supporting Senate Bill 485 homestead exemption and 2) giving the one mill rollback. The one mill rollback returns 80% of that increase to homeowners, and when added to SB 485 homestead exemption, we anticipate that APS will return approximately $200 million dollars over the next four years to homeowners.
I encourage you to get involved in the upcoming public hearings scheduled as follows:
· Monday, July 16 Public Hearing 1 and 2 at 11am and 6pm (time to be confirmed)
· Monday, July 23 Public Hearing 3 at 6pm (time to be confirmed)
Given that all of this can be really confusing as a homeowner, we’ve created a back-of-the-napkin calculator (shout out to Budget Chair Nancy Meister…this was her brain child!) to help you analyze for yourself how a decrease in the millage rate and an increase in the homestead exemption could affect you. The screenshot below will walk you through how to use it. The tool will show you the percent increase in your values due to reassessments/ revaluations, the savings on the taxes you pay with a one mill roll-back and how Senate Bill 485 could provide additional relief if passed in November and applied to next year’s tax bills. While the tool isn’t perfect (remember, these are just estimates and may not be exactly what you will experience), we hope that it can offer some insight on the impacts of different scenarios!
Thank you ABOE and ATL community! “Kid, you moved mountains!”
“You’re off to Great Places!”
-Dr. Seuss in Oh, The Places You’ll Go
-Dr. C. in atlsuper.com
(June 21, 2018) Every year we build our budget with care. We want it to express that we value our students, our current and former employees, our taxpayers and our communities, and we aspire to stay on the path to becoming a more efficient, quality-driven school district. This year, it also requires something else, and as the wise, beloved children’s author says: tact.
Therefore we must also work even harder to be respectful to our homeowners and taxpayers. The FY2019 APS budget, like life, is a balancing act that must both help our homeowners and support and invest in our children. Here’s how we have been working to do that and what comes next to achieve our goal.
Earlier this month, the Atlanta Board of Education adopted our proposed $818.4 million general fund budget for the 2018-2019 school year (Fiscal Year 2019) with average growth in revenue, in part, to continue to rightsize the APS budget while strategically investing in schools and programs but with a mindful eye on the looming tax digest. Further, it continued to support our new operating model philosophy of pushing more dollars directly to schools and students. A new component of that work for FY2019 includes allowing schools access to more than $9 million in textbooks and substitute funds in support of site-based decision-making.
THE TAX DIGEST UPDATE:
We have now received the 2018 tax digest from the Fulton County Board of Tax Assessors with the preliminary net digest showing a 24.7% increase. That local revenue accounts for approximately 73% of the District’s General Fund revenue.
Since last school year, Atlanta Board of Education and school officials have been aware of the high property assessments homeowners would inevitably receive and committed immediately to helping homeowners with some tax relief.
Here’s what we did: First, APS joined its local legislative delegation in passing Senate Bill 485, a homestead exemption bill increasing the exemption from $30,000 to $50,000 resulting in significant property tax reductions to homeowners beginning with the 2019 tax digest. Second, I will be recommending that the district continues to honor that commitment by offering homeowners additional tax relief in the form of a reduction in the millage rate. Those two actions combined will reduce the pressure on the tax bills. The exact amount of the millage roll-back recommendation will be made on Friday at the upcoming budget commission meeting.
And, yes, there is some backfilling that the District will need to do so we won’t be able to do a full roll back, and here’s why:
- The increase in property assessment values takes into account a decade of failing to keep up with rising property values in Fulton County, including the 2017 assessments that were frozen at 2016 levels by the Fulton County Board of Commissioners. That frozen digest resulted in a permanent revenue loss to the District of $56 million.
- Subsequently, cash flow issues resulted in immediate budget cuts last year, including furloughing employees. In a commitment to employees, we want to ensure a multi-year plan that will earmark reserves that can build up the fund balance for job and pay stability.
Therefore, I will also recommend that the Board restore some of the District’s fund balance, bringing it closer to the average fund balance recommended by rating agencies for a district of our size; consider some previous service level cuts for district and classroom initiatives; plan for future stability, or some combination of these. The point is that we have to correct a little of the past and be more thoughtful about future pressures.
SIDEBAR ON TADs
[Further, real talk for those who want to be in the APS money weeds, keep reading. I think it’s important to call out all of the exciting growth in the City of Atlanta related to the Tax Allocation Districts (TADs) in which APS participates. They are indeed working. TADs are a great development tool when designed and managed properly. The five TADs in which APS participates are showing roughly $800 million in growth. But, wait for it…
HOWEVER, it is important to point out the school district DOES NOT receive any money from the growth collected in TADs, under the current structure, which went into effect from 1996 to 2006. An easy way to understand the implication on APS is by looking at the Atlantic Station TAD. The 2017 numbers reflect $11 million of residential property tax collection. How much of that $11 million did we receive? Slightly over $150,000. Further, the debt on this TAD is not being paid down, so there is no end in sight for it to ever be properly managed which is out of the district’s control. Now, I’m done with that.]
BACKGROUND ON FY19 BUDGET
Meanwhile back at the ranch with the tax digest in hand, APS can now continue the process of finalizing our FY2019 budget. We are proud of the fact that our annual budget adoption process is transparent and allows opportunities for community input. The next step is for the Board to set the millage rate. It will host three public hearings in the coming weeks to allow the community to provide input and feedback as we finalize the budget. Stay tuned for those dates and locations to be announced soon. I will make that recommendation at the Budget Commission meeting too at its meeting on Friday, June 22 at 2 p.m. at the Center for Learning and Leadership at 130 Trinity Avenue SW.
As a reminder, some key highlights of the FY2019 budget include:
- Approximately $256 million toward ensuring a more equitable distribution of funds to schools, with a particular emphasis on poverty.
- Over $45 million for investment in the Atlanta Public Schools Turnaround Strategy.
- Nearly $21 million toward innovative programs and initiatives in the primary grades (Pre-K through Third), as well as greater autonomy and accountability for principals to ensure all students are reading by the end of third grade.
- More than $55 million to continue funding an annual 3% increase of pension obligations.
- An investment of an additional $12 million in the district’s compensation strategy that includes a step increase and a 1% salary increase for all eligible employees.
- A little over $11 million for the district’s signature programs.
Most of the district’s budget is dedicated to staff salaries and benefits (a total of $550.5 million). This includes mandatory costs such as the unfunded pension ($55 million and increasing by 3% every year) and TRS, the state’s Teacher Retirement System ($66.5 million, an increase of $16 million over last year). Another $118 million goes to supporting district charter schools. Also, APS is largely an organization of instructional staffing costs with approximately 82% of the total FY2019 budget dedicated to salaries, benefits, pensions, and charters.
DEDICATION IF THIS BLOG WAS A BOOK
I want to send a shout out to our Chief Financial Officer, Lisa Bracken, and the rest of our Finance Department for all of the work they’ve done to manage our budget effectively and to help us build a strong budget for the future.
And I want to thank the Board’s Budget Commission, especially its Chair, Board Member Nancy Meister, for its hard work as well.
I also want to thank you for participating with us in this process! Keep coming to meetings and the public hearings. Help us stay true to our mission and remain focused on our core value of putting students and schools first (while also offering some help to our homeowners). We are on this Journey of Transformation together, and each year it may still have bumps in the road, but I feel we are getting closer and closer to our destination. I appreciate all your support!
OK, that’s enough reading for now. (I’ll send a quick update after the Budget Commission to keep you up to speed. Refresh this link to see latest Budget Commission materials when they are posted later this afternoon.)
Get back to enjoying your summer…we got you on this tax digest!