The decision last week by the Georgia Supreme Court banning the use of school taxes in Atlanta's Beltline project highlighted a contradiction that has long dogged such ventures.

Local school officials agreed, sometimes under considerable pressure, to special tax districts to pay for community redevelopment, even as some argued it was the wrong way to use school property taxes.

Why?

"A long-term benefit" to their bottom line vs. a "short-term loss," said lawyer Phil Hartley, whose firm, Harben & Hartley, works with the Georgia School Boards Association. "Generally, tax allocation districts were sought by cities and, in some cases counties and school districts were asked to go along."

But the state Supreme Court said last week that school taxes cannot be used to help pay for tax allocation districts, or TADs, despite their popularity as a funding mechanism among developers and politicians.

Proponents often sell TADs as a way to renovate run-down neighborhoods or spur development by building roads, sidewalks and other improvements —- all paid for by redirecting a portion of future property taxes. Schools account for the bulk of property taxes in most jurisdictions.

Unless school boards agreed to participate by forgoing increased tax revenue, there would not be enough funding to pay for all the desired improvements.

Some systems had clearly struggled over the issue before the court's ruling.

In DeKalb County, school board members have long said no to the entire concept. They have never approved a TAD —- despite repeated requests by county officials —- on grounds that such districts divert money from education.

Both the Fulton and Cobb county school boards, despite earlier approvals, had imposed moratoriums on considering any other special tax districts pending outcome of the Atlanta Beltline case.

"We caught a lot of flak for it, but it was the right thing to do," said Lindsey Tippins, a Cobb school board member who last year raised doubts about the constitutionality of using school tax revenue to fund redevelopment projects.

"Our charge as board members," Cobb school board member Teresa Plenge said, "has never been that we should be a part of developers' business."

Advocates sold such proposals as a short-term loss that would pay off in the long run through increased taxes on higher-end development. Often, the sales pitch worked —- despite systems usually being loath to give up revenue because of state budget cuts and economic downturns.

By far the most activity came in Atlanta, where school board members had approved five of 10 TADs sought by the city.

Atlanta school board members decided not to participate in a tax district for the city's Princeton Lakes development, and they had not yet made a decision on four others before the ruling, board President LaChandra Butler Burks said.

She was not sure what happens next for the school system.

"We want to give [legal counsel] time to really, really sort through the decision," Butler Burks said.

Staff writer Diane R. Stepp contributed to this report.