DeKalb schools opposition firm on rerouting school taxes

Developers and some government officials are engaged in a political disagreement with the DeKalb County School District over its refusal to give up future tax income to help rebuild Doraville’s shuttered and demolished GM plant into a mixed-use development.

New DeKalb Superintendent Steve Green says schools need the money during this critical time of rebuilding a troubled system, but business interests and some state officials argue that redeveloping the site is critical to the county’s economic future. The impasse has stirred up political arguments, with Green saying one piece of state legislation introduced by DeKalb’s Rep. Tom Taylor, R-Dunwoody, is aimed at punishing the schools.

House Bill 969 seeks to cut DeKalb school funding by about $56 million annually by reducing the amount of money the school system collects in taxes.

"Today, after much work, we have finances under control with fiscal integrity … but our system remains at a crucial stage of recovery," Green writes in an op-ed submitted to the Atlanta Journal-Constitution. "We still need resources to address aging classrooms, teacher pay, safety, and support services. Now, we face a new — apparently politically motivated — obstacle."

Taylor said his legislation has nothing to do with the district's refusal to participate in the Doraville tax allocation district. Instead, it's making right a 30-year oversight from when the district operated DeKalb Junior College (now Georgia Perimeter College). DeKalb was allowed to have a higher tax rate for schools of 23.73 mills to help pay for the junior college. The Board of Regents of the University System of Georgia took over the junior college in 1986, and Taylor said the school system should now be limited like most other districts to 20 mills.

“Looking at that, that’s a lot of money that DeKalb County has had, yet it has consistently failed to meet the 65-percent (rule for spending on classroom needs.),” Taylor said. “Their classroom costs have been flat, but their administrative costs have been (rising). It’s billions of dollars that have basically been squandered.”

The Doraville tax allocation district would work this way: schools and local governments would agree to collect only the property taxes the 165-acre site now produces for the next 25 years. For schools, that is about $1 million yearly. The developers would start building on the site — a proposed mix of housing, offices, retail and businesses. The increase in property taxes as values increased would not go to schools, DeKalb County and Doraville, but to pay off up to $247 million in bonds that would be issued to pay for the infrastructure the developers want before starting.

Other agreements can be written into TAD's, such a guarantees of minimum tax income or extra payments to a government entity to offset some of the lost income.

The City of Doraville, which contains the site, has agreed to the TAD. DeKalb County commissioners have also agreed, with the caveat that they would participate if the school district agreed to join.

If the project were to continue without school board backing, developers would be forced to downsize — or abandon — their plans.

TADs have been successful funding mechanisms for infrastructure at Atlantic Station and for the Beltline, though the latter has been at the center of a dispute over missed payments from the city of Atlanta to Atlanta Public Schools, which concerns Green.

Green believes educating children who could grow up and enter the workforce and attract businesses is among the district’s best ways of contributing to development.

He cited several factors in his decision to not participate, including the fact that repayment is not guaranteed, and that while the school district would put up half the money for the TAD, it would have just two of nine seats on an overseeing board. He expected the project could cost the public as much as $600 million after bond repayments.

Green, in the opinion piece, also said his research shows that not all TADs work out, and the recent problems between Atlanta and Atlanta Public Schools over the Beltline TAD make him wary. The city was unable to fulfill it’s agreement for payment of tens of millions of dollars to the school.

However, the Doraville TAD is set up differently than that deal, with no guaranteed extra payments to schools.

Luke Howe, the economic development director for the city of Doraville, said the Doraville TAD is one of the more secure agreements in which the school district could participate. A group of well-known developers are already in place with the project with expectations clear on what will be created.

The jobs created during construction and after development would help the local economy, and in the long term, schools and local governments would benefit, proponents argue.

“In this case, we know what we’re going to do,” he said.