Most Ga. counties take a school tax collection fee. In Cobb, it could be illegal.
The Cobb County School District said the county tax collector has unlawfully charged it hundreds of millions of dollars in administrative fees, according to a lawsuit filed this week that aims to stop the county from keeping a cut of school tax revenue.
The school district is alleging that it is exempt from a state law that allows counties to keep up to 2.5% of the school taxes they collect. The lawsuit comes after county officials informed the district of its intent to raise the annual collection fee from 1.6% of revenue collected to the maximum 2.5%.
“We believe they do not have the legal authority to take more money from our schools,” stated a news release from the Cobb County School District. It went on to say that the fee is “a money grab … for absolutely no reason.”
But Cobb is actually an outlier when compared to most counties in Georgia.
Statewide, more than 100 counties charge the full 2.5% fee, according to data collected last year by the ACCG, Georgia’s county association. Only about two dozen charge less, including some of the most populous counties in the state.
The similarly sized DeKalb County, for example, levies a little more than $1 billion in annual school taxes. Its 1.25% administrative fee translates to about $12.5 million.
In Cobb County, the 1.6% fee in 2026 translated to more than $13 million. An increase to 2.5% would cost Cobb schools more than $20 million, the equivalent of 200 teachers’ salaries and benefits, the district said in a news release.
The legal debate
The school district has a legal exemption from the administrative fee, according to the complaint filed in Cobb County Superior Court. A local act passed by state lawmakers in 2001 requires the tax commissioner to give all school tax revenue to the district, except for a 1.6% collection fee from 2001 through 2011, the complaint says.
The lawsuit says the county passed an ordinance to extend the 1.6% fee to 2021. Though the district believes the ordinance was illegal, it has since expired and isn’t the subject of the lawsuit. The county has continued to collect the 1.6% fee since 2021 without taking any official action, according to the complaint.
School district officials decided to sue after being notified in May of the fee increase. Over the next five years, the increase would cost the district $100 million in fees, according to the complaint.
In a letter to the school system, Cobb County Chairwomen Lisa Cupid wrote that “there is no valid local legislation designating a commission rate for the collection of school taxes.”
The letter did not explain further how it determined the local act was not valid, and a spokesperson for the county did not respond to a question from The Atlanta Journal-Constitution about the assertion.
The issue hinges on the interpretation of the law, the county said in an emailed statement.
“We believe it is appropriate for the courts to provide clarity on the issue,” the statement read.
The Cobb County tax commissioner, who is named in the lawsuit, does not decide values, millage rates or fees and does not retain any portion of the taxes, fees or commissions that are collected, the office said in an emailed statement.
“Our office remains dedicated to administering tax laws with fairness, accuracy, and transparency, ensuring that all public funds are properly managed and distributed,” Tax Commissioner Carla Jackson stated in an email. “We will continue to serve the people of Cobb County with accountability, professionalism, and integrity.”
The school district said in the lawsuit that the fee is both “unreasonable and unlawful.”
“Taking even one dollar that’s supposed to help students and teachers doesn’t work for our Board and Superintendent,” Chief Strategy and Accountability Officer John Floresta said in an emailed statement to the AJC. “This lawsuit says enough is enough.”