Judge grants Fulton Schools’ request for tax intervention

Property tax revenue should soon be flowing to system



NORTH FULTON, Ga. – Fulton County School officials are celebrating a decision to allow property tax bills to finally be issued, but belt-tightening and costs savings will continue through the end of the calendar year as the financial picture stabilizes.

On Nov. 3, Magistrate Court Judge Alan C. Harvey granted a Temporary Collection Order (TCO) authorizing Fulton County taxing authorities to issue tax bills to property owners.

Fulton County Schools, Atlanta Public Schools and Fulton County Government had joined together to seek legal action allowing them to collect property taxes which fund their operations.

The legal intervention was needed after the Georgia Department of Revenue rejected Fulton County’s tax digest in October, effectively halting the ability of the county, cities and school systems to receive tax revenue.

In a seven-page letter to Fulton County Tax Commissioner Arthur Ferdinand in October, the state DOR cited numerous concerns related to the decision to use a decades-old law to freeze assessments at last year’s levels.

Particularly troubling to the state was that Fulton County’s freeze only applied to residential properties, not commercial parcels.

Despite the state concerns, the judge ruled a need existed to provide funding to the entities which depend upon tax revenue.

“[The judge’s order] is a win for Fulton County Schools as we now have confirmation that revenue will soon be on its way to fund our schools [and provide the resourced they need],” said Fulton School Superintendent Jeff Rose. “This ruling allows us to breathe a little easier, but there is still a long road ahead.”

The Fulton Tax Commissioner expects property tax bills to be mailed by Nov. 15, with county bills due by Jan. 18, 2017.

Fulton Schools’ financial viability depends on many of those bills being paid prior to the due date.

The Fulton County School System is the largest recipient of tax dollars from county taxpayers – with about $600 million expected in FY18. This accounts for 63 percent of the system’s operating budget, with the remainder coming from the state.

Without the ruling, Fulton Schools faced the possibility of running out of money by mid-December, putting into jeopardy the ability to provide the second December paycheck to its employees.

Tax collections were already more than two months late, following an unprecedented series of events beginning last spring when tax assessments were first issued. Public outcry over hikes in home values led the Fulton County Commission to freeze assessments at the 2016 level, re-evaluate all tax bills, and the delay of issuing adjusted tax bills.

Fulton Schools has not received any local tax receipts since July 1, said a spokesperson, and has been forced to use its reserve funds of nearly $300 million to fund school operations. With $70 million in monthly payroll alone, and another $15 million in other expenses, that fund would be depleted by mid-December.

Immediately following the rejection of the tax digest by the state, Fulton Schools implemented a complete spending freeze of all non-essential expenditures, including a halt to new hires, staff travel, student field trips and classroom supplies.

A district spokesperson noted only costs related to safety and security, compliance issues, fuel and utilities are not impacted. No decision has been made on lifting the spending freeze in January.

Rose stressed the financial crisis affecting Fulton Schools is occurring through no fault of the school system or its school board, known for its conservative financial management.

“This situation is not through any fault of our own. Fulton County Schools has exercised appropriate spending and prudent budgeting,” said Rose. “The Fulton County Board of Commissioners put us in this situation when they voted to freeze property tax values at 2016 levels.”

He lauded the patience and support of system staff and the community, noting “nothing could have prepared any of us for what has occurred over the past several months.”

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