Fulton County Schools facing “dire cash flow situation”
November 1, 2017
“Why don’t we have any money?” “What did Fulton do with our money?” These and many similar questions have been heard around Milton in the week following the Georgia Department of Revenue’s rejection of Fulton County’s 2017 Tax Digest. “This situation is not through any fault of our own. Fulton County Schools has exercised appropriate spending and prudent budgeting,” said Dr.Jeff Rose, Superintendent of Fulton County Schools. “The Fulton County Board of Commissioners put us in this situation when they voted to freeze property tax values at 2016 levels.”
The Georgia Department of Revenue denied the 2017 Fulton County Tax Digest, resulting in a major delay in collection of property tax revenue. The issue stems from the Fulton County Commission’s decision to “roll back a portion of the tax digest for reassured residential properties to 2016 levels. This has caused a delay in collection because the Fulton County Tax Assessor had to recalculate property assessments, and property notices had to be resent, delaying the typical process by more than two months,” wrote Dr. Rose in an email to all FCS staff. Property tax bills are usually sent in the beginning of August and are collected in mid-October, but as of October 31, the county has no idea when the money will be collected. In order to send tax bills, the digest must be approved.
“The situation is dire,” Robert Morales, chief financial officer for Fulton County Schools said in a statement. “The district now has a cashflow problem. We are trying to determine how the district will operate without the anticipated tax revenue, and we may need to borrow money to make our payroll and pay our bills.”
Fulton County and Atlanta Public Schools are taking legal action, asking a judge to order that taxes be collected after a certain amount of days in a Tax Collection Order. A hearing is scheduled for November 3.
It is estimated that the tax digest creates about 62.5% of Fulton County’s $777 million budget, according to the Atlanta Journal Constitution. Atlanta Public Schools has already taken out a $100 million loan to solve cash flow problems earlier in the year. If the loan is not repaid by the end of December, Atlanta Public Schools will be in an even worse state. APS Superintendent Dr. Maria Carstarphen has stated that “the state’s rejection of the tax digest puts APS’ finances in peril.”
“Our plan of action also includes necessary belt-tightening and cost-saving measures we will all take immediately to help improve our financial picture through January,” wrote Dr. Rose. Some of these measures include a freeze on hiring district-wide, a moratorium on out-of-system travel (conferences and field trips,) and freezing spending on all items except those related to safety, security, federal compliance, fuel, and utilities.
Updates to follow.
Update on November 3, 2017 at 2:10 P.M.
The hearing for a tax collection order is currently underway.