Can school money go to cities? Ruling unclear

A Georgia Supreme Court ruling announced this week did little to clarify Atlanta school funding of non-education development projects.

Citing procedural errors, the Supreme Court reversed a year-old decision by Fulton County Superior Court Judge Craig Schwall. Schwall had ordered Fulton Tax Commissioner Arthur Ferdinand to give a portion of school revenue directly to the city, not the Atlanta school system.

The school money helps secure bonds sold for projects in underdeveloped tax allocation districts, or TADS. Not sending the money directly to the city will harm TAD bond sales, according to the Atlanta Development Authority.

ADA attorney Veronica Johnson said the reversal was limited; Ferdinand still must turn school money over to the city.

But Samuel Woodhouse, the tax commissioner’s attorney, disagreed. “It says reversed. It doesn’t say reversed in part,” Woodhouse said. Ferdinand will stop giving the school money to the city when the case is returned to Superior Court for further adjudication, he said.

The dispute began in February 2008 when the Supreme Court, ruling on a lawsuit brought by attorney John Woodham, said school tax money could not be used for non-education purposes. Voters later approved changing the state Constitution to permit that use.

Ferdinand interpreted last year’s court ruling to mean school taxes collected must go to the school system. The city sought an emergency court hearing, at which Schwall ruled against Ferdinand. The tax commissioner appealed to the Supreme Court, which this week said Schwall’s decision went too far.