Fulton County, Atlanta Public Schools Facing Budget Concerns

When commissioners voted to roll back this year’s property assessments to last year’s values, they essentially hit the reset button on this year’s tax process.

This means two things for both school systems: revenue will be delayed—which means schools will have to decide how to finance operations while waiting for the money to come in—and they may be faced with 2018 budget shortages.

APS outlined in a letter sent to the county attorney before the Fulton Board of Commissioners made its decision it would have to take out a tax anticipation note (TAN)—a short-term loan—to meet its “cash obligations beginning in September.”

The concern is if the tax digest, which is a list of all taxable properties in an area, is released late, APS may not be able to pay back the money on time. The TAN must be paid back by the end of the year.

Marvin Dereef, the Fulton County school system’s deputy chief financial officer, said taking out a TAN is one option. Another is to dip into the system’s reserve fund that could float the schools for a couple months.The reserve funding was established during the recession.

“Basically the board established a policy to ensure that when there’s tough economic times that we have a means to sort-of cover some costs over a few months,” Dereef said.

Both school districts were told by Fulton County officials to expect a six-percent increase, but it’s uncertain whether the two school systems will see that increase or be faced with a budget shortage. The assessment rollback was only for homeowners, not for commercial property owners. Lost revenue could also be potentially made up by hiking millage rates.

However, APS said in its letter to the Fulton County Attorney it would have to consider cuts, such as teacher furlough days or a hiring freeze. Dereef said Fulton’s school board is working on a contingency plan.

“We would consider a variety of things. Obviously we would try to minimize the impact to our instruction,” Dereef said. He wouldn’t elaborate on where the school system might make cuts.

Fulton County officials are working on a revised timeline for this year’s tax process.