Atlanta Public Schools backs off proposal to lower property taxes

Atlanta Public Schools continues to make budget adjustments after revenue projections increased above expectations. AJC FILE PHOTO/Alyssa Pointer
Atlanta Public Schools continues to make budget adjustments after revenue projections increased above expectations. AJC FILE PHOTO/Alyssa Pointer

Atlanta Public Schools officials have pulled back on a July recommendation to give homeowners a modest tax cut.

Instead, the district is proposing to maintain the current tax rate and use higher-than-expected revenue to shore up its savings, boost the minimum wage for about 1,400 employees and restore some cuts made to schools.

The district’s chief financial officer initially recommended to the school board in July that they roll back the tax rate. When the administration brought proposed budget changes back to the board this week, the recommendation had been updated. Superintendent Lisa Herring said Thursday that the proposed rollback would save homeowners less than $10 a year on every $100,000 of property value.

“After careful review, Atlanta Public Schools determined that this benefit did not outweigh the risk of the economic uncertainty and that maintaining the millage at its current rate is the most prudent decision to make at this time given the additional uncertainty of the impact of COVID-19 on the future,” she said in a written statement.

Shifting revenue projections have caused the district to make several changes to the budget for the year that began July 1.

The school board in June initially approved $31 million in cuts and the use of about $18.3 million in fund reserves to balance an $843 million general fund budget.

But in the weeks since, officials have revised revenue projections upwards. The district currently estimates it will receive nearly $30 million more in state dollars and local property tax revenue than what it projected in June.

The additional money will allow the district to build its fund reserves, restore some of the earlier cuts and pay for new initiatives.

Administrators told the board this week they plan to increase spending by nearly $11.6 million. Schools, which saw their allotments cut, will get back a portion of those cuts.

The district will hike the minimum wage from $12.70 an hour to $15 an hour for about 1,400 full-time employees, including custodians, food assistants, clerks and paraprofessionals. The pay raise will cost the district about $2.3 million this year.

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The district also plans to hire a couple new administrators and to purchase software and equipment, among other expenses.

The approach does not include rolling back the tax rate, which differs from mid-July when Chief Financial Officer Lisa Bracken told board members that revenue projections were up and first recommended lowering the property tax rate from 20.74 mills to about 20.5.

If the district lowered the rate, it would receive roughly $9 million less in taxes, and the owner of a $200,000 home would save roughly $20.

At the July meeting, Bracken said a reduction would allow the board to more quickly adopt the tax rate without having to hold public hearings that are legally required if it isn’t rolled back. She also said the move would “return the unanticipated revenue to the homeowners and the struggling businesses that also need the relief at this time.”

But district officials walked back that idea this week, advising the board to instead maintain the current property tax rate at 20.74 mills.

School board Chairman Jason Esteves said the amount individual homeowners would save is fairly small, and board members want to take a conservative approach because of ongoing economic uncertainty amid the coronavirus pandemic.

“The future is unknown, and we’d rather be conservative this year, see where we fall and if we can provide taxpayers a bigger benefit then we do that next year versus doing it this year with a lot of unknowns and very little benefit to the taxpayer,” he said.

Under Georgia law, if APS maintains the tax rate at the same level as the previous year it is considered a tax increase because it doesn’t lower the rate down to the level that would offset tax increases because of higher property valuations.

The board will hold three online public hearings on the proposed property tax rate. The first two will be held at 10 a.m. and 6 p.m. Monday. The third hearing will be held at 9 a.m. Aug. 17, after which the board is scheduled to vote on the tax rate.

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