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School board mulls tax hike
Increase would help cover $13 million budget shortfall
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Forsyth County homeowners likely will see their property taxes rise to cover a projected $13 million deficit in the school system's 2008-09 budget.
A millage rate increase is one of the few options left for the school district, which has already slashed spending by about $6 million in its $270 million budget.
While an exact figure has not been determined, board member Ann Crow said the difference likely would be made up from a combination of raising the millage rate and tapping into the school system's financial reserves.
To completely offset the difference through property tax, the current millage rate of 14.4 mills would need to increase about 2 mills, which Crow said is not an option.
"We're definitely not going to raise it 2 mills at all," she said.
One mill equals $1 for each $1,000 in assessed property value. With a 1-mill increase, a property tax bill would increase $100 for each $100,000 in property value.
School officials have attributed the deficit to several factors, among them a sluggish economy, less growth in the tax digest and rising fuel costs.
The board's next meeting is set for Thursday. By that time, Crow said, officials likely will have an exact breakdown of the tax digest growth from the county, as well as a more definite version of the budget, which must go to the state by June 30.
At the meeting, the board also will likely vote to begin the millage rate increase process, which includes public hearings.
"That's the bottom line," said Nancy Roche, chairwoman of the school board. "Cut programs or [pull from] reserves and raise the millage rate."
During last month's board meeting, spending cuts were factored into the preliminary budget, which reduced the projected deficit from nearly $19 million to about $13 million.
The effort was aided by an adjustment in the projected student population. Estimates show the school district will have about 495 students less than expected for the coming year.
That means the system can hold off on about $600,000 worth of books, computer programs, in-class expenses and portable classrooms, Crow said.
Roche said technology was among the biggest cuts, but "every single department went through and asked, 'What can I live without next year?'"
"Everyone worked together," she said. "It was a real team effort to find what we can cut."
Last year, the school board shifted about $9 million from system reserves to balance the budget, Crow said. But the school system also rolled back its millage rate last year, from 14.71 mills to the current rate of 14.4.
The county's millage rate is the lowest of surrounding counties, including Cherokee, Cobb, Gwinnett, Hall and Fulton, which range from just under 16 mills to 20 mills.
Charles McCrary, parent of a Forsyth Central High School junior and two recent graduates, said he wouldn't have an issue paying higher taxes for the school system.
"When you're looking at a down economy, you always want to see them try other options," he said.
"But when you look at the growth of Forsyth County, I don't see an issue with raising the millage rate a little bit, simply because of the fact that it's fairly low [when] being compared to other counties."
Crow said the school system is left with few other options and only so much of its reserves can be depleted without hurting the safety net or affecting the system's bond rating.
The system currently has about $52.5 million in its reserves. By October, however, that figure likely will be down to about $21.5 million, due to operating costs.
School district spokeswoman Jennifer Caracciolo said the system aims to have about a quarter of its operating costs in reserves, which would be about $67.5 million.
The school system's preliminary budget is based on estimates of the county's tax digest growth. Last year's rate was 12.3 percent. Due to the economic downturn, however, this year's rate likely will be in the single digits.
The county tax assessor's office is still calculating the exact rate, but estimates range from 4.5 percent to 6 percent, which is what the school system's budget is based on.
Each percentage point is equivalent to about $1.17 million. If the school system's 6 percent estimate was too high, it could be face an even larger hole.
"We don't know what our revenue is going to be locally, so it's really hard to budget," Roche said. "Until we find that out, we don't even know what our shortfall is going to be."
Because the state mandates 65 percent of the budget must be spent in the classroom, and nearly 88 percent of the budget goes toward personnel, there is little wiggle room to reduce spending.
It may be too late for alternatives this year, though the school board may spend some time considering a new law that would allow school systems to charter themselves.
Becoming a charter system would free Forsyth from state mandates like class size and budget allocation, while increasing accountability.
"It would help us," Crow said. "Because we could allocate funds differently, and I think that would help. We've got the charter application, but it's not a done deal. We really have to review the whole process to see if it's even something we can do."
Either way, she said, it is "not something that would happen in a year."