The financial outlook for the Fulton County School System continues to improve as state and local revenues reflect the uptick of the economy. This comes as welcome news for school officials who saw revenues plummet for several years beginning in 2008, leading to cuts in programs and staff.
Early in the budget process for fiscal year 2015, Fulton Schools is anticipating a general fund budget of $832.7 million; up from $804.6M in FY 2014, which ends June 30. The increase comes from an $11 million increase in local tax revenue, along with an additional $17 million from the state.
Robert Morales, chief financial officer for the FCSS, said the additional state dollars were earmarked by Gov. Nathan Deal for specific issues to help local school systems.
“The Governor has recommended that any additional state funds be used to reduce furlough days (we have none), increase instructional days and enhance teacher compensation,” noted Morales.
There are currently 177 days in the Fulton calendar, but that will likely rise to 178 next year. No recommendation has been made on teacher raises. Last year Fulton provided the only raise to teachers in the metro area.
While the additional state dollars are a positive sign, it is far below the amount FCSS “earns” under the quality basic education (QBE) funding formula. Based on enrollment and programs, Fulton is entitled to nearly $491 million for FY15. It will actually receive $324 million after the state deducts $150 million to redistribute to less affluent school systems under the “fair share” process, along with an additional $33 million through austerity cuts.
The austerity cuts have been in place since 2004 when the economy began showing signs of weakness. The cuts were originally intended to be temporary. Three years ago the cuts became permanent. Since FY2005, the state has withheld nearly $320 million from the FCSS under the austerity cuts.
Morales said the FY15 austerity reduction is 30 percent less than last year, indicating the state is moving in a positive direction.
The local revenue picture is starting to improve, noted Morales, however it will likely take a few years to recover fully.
“Based on the presentation from the Fulton County Chief Assessor, local tax revenue is projected to increase only slightly. This is significant as local property taxes account for 63% of our revenue,” noted Morales.
During a budget presentation on March 11, Fulton Tax Commissioner Arthur Ferdinand said the outlook is improving, but noted the property value digest and interest rates will remain flat through FY15. He noted rising home prices are not reflected in the tax digest. Only new construction, significant improvements and extensive remodeling are considered in assessing value.
Tax collection rates in Fulton remain strong, said Ferdinand, with 98 percent of taxes collected this year.
“It has been a very good year and [we’ve collected] 98.6 percent of what we billed. And there are still three more months [remaining] to get to 99 percent by the end of the tax year on July 1,” said Ferdinand.
He noted getting to 100 percent collection—which is about the last one million dollars-- is nearly impossible to achieve for various reasons.
The millage rate will likely remain unchanged for the sixth year. The current millage rate of 18.502 is the lowest in the metro area.
A mill is assessed for each $1,000 of assessed valuation. A home valued at $200,000 in Fulton County (outside the city of Atlanta), with the standard homeowner's exemption will pay $3,663 in taxes to the school system.