Judge Allows Fulton County To Collect Property Taxes

FULTON COUNTY, GA -- A Dekalb County judge has granted an order allowing Fulton County to collect property taxes, a move that puts a stop to an inevitable crisis that would have hit local classrooms the hardest.

Senior Magistrate Court Judge Alan C. Harvey approved the county's petition authorizing for the immediate and temporary collection of taxes after the state Department of Revenue rejected the county's 2017 tax digest. That rejection meant the county, its 15 cities and two schools systems, particularly the latter, faced budgetary shortfalls that could have seriously curtailed its operations.

The county said it was pleased with Judge Harvey's ruling, adding the prompt decision will allow tax bills to be issued using the 2017 corrected tax digest and 2017 millage rates set by local jurisdictions.

"Our focus throughout the process has been to protect the interests of homeowners in this county and to also fashion a solution that allowed government services to continue without disruption," it continued. "The outsized increases in the original assessments were so large that a disproportionate number of homeowners would have seen dramatic increases in property taxes and placed many in a precarious financial position."

Friday's ruling means property tax bills will be mailed property owners throughout the county. The Fulton County School System, the largest recipient of tax dollars from county property owners, praised Judge Harvey's decision.

"This is a win for Fulton County Schools, as we now have confirmation that revenue will soon be on its way to fund our schools, which means paying our 14,000 employees and supporting our 97,000 students with the resources they need,” said Superintendent Jeff Rose. “This ruling allows us to breathe a little easier, but there is still a long road ahead.”

The county was joined by Fulton County and Atlanta Public schools to seek legal action for the collection, a request that was filed Oct. 26 for the court to intervene in the process. Both school systems announced earlier this week that they were on the verge of rolling out various measures, one of which was possible employee furloughs, to weather the financial hardship.

“We appreciate our employees’ extraordinary patience and the support shown by our community,” said Dr. Rose. “Nothing could have prepared any of us for what has occurred over the past several months.”

Of course, Atlanta Public Schools also expressed gratitude over the judge's decision, adding that its operations are highly dependent on those tax collections that were in jeopardy of not coming into its coffers.

“All of us at Atlanta Public Schools are pleased by today’s court ruling which begins the process of collecting the property tax revenues that are so critical to the safe and successful operation of our school system,” said Dr. Meria J. Carstarphen, Atlanta Public Schools superintendent. “At the same time, the initial delay in tax collections will still have a significant impact on our ability to operate as normal for the remainder of this calendar year.”

After pressure from thousands of property owners who received considerably higher reassessments, the Fulton County Commission voted to freeze a portion of the 2017 tax digest reassessed for residential properties at 2016 levels. Due to the delay caused by the Commission's decision, the Fulton County Board of Assessors had to recalculate property assessments, and property notices had to be resent, delaying the typical process by more than two months, the Fulton school system said.

On Oct. 25, the Georgia Department of Revenue rejected the tax digest submitted by the county, noting it was concerned that the Board of Assessors, acting upon a resolution approved by the County Commission, did not have the legal authority to roll back those assessments.

This series of events, the Fulton County School System, resulted in the district not receiving the expected revenue to fully fund its 2017-18 budget. No property tax revenue has been received since July 1, requiring the school system to depend on the $295 million it had in cash reserves. The district calculates its budget based on 63 percent of revenue coming from property taxes, with $70 million a month going to pay teachers and staff and another $15 million a month going toward other expenses.

If Judge Harvey chose not to intervene in the crisis, Fulton County schools said it would have run out of money in December. Belt-tightening and cost-saving measures already are under way for the rest of the calendar year, which include halting new hires and new spending, except for items related to safety and security, federal/state compliance, fuel, and utilities.

The district also has placed a moratorium on out-of-system travel, and student field trips are on hold while a process is developed to review them to limit district costs.

APS added it will continue to monitor cash flow closely and will continue to review options to mitigate the short-term impacts in the delay of tax collections. The district said it's taking the following steps to address the short-term cash flow shortages caused by the delay:

• Slow outgoing cash payments
• Implement a hiring freeze, spending moratorium, and out-of-system travel freeze
• Delay the $500 one-time payment for employees not on the teacher salary
• Implement targeted furlough days for select, non-teaching positions
• Defer unfunded pension payments
• Work with our charters to negotiate delayed payment

“This delay in tax collections has really put a financial burden on Atlanta Public Schools,” Carstarphen added. “But I want the community to know that we are aggressively implementing these spend-reduction strategies as a means of ensuring the smooth and safe operation of our school system for the remainder of this calendar year, while ensuring we maintain our excellent credit rating.”

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