Atlanta Public Schools considering furloughs due to tax digest rejection

Atlanta Public Schools is forming a contingency plan to deal with cash flow problems if the court does not grant Fulton County, the Fulton County School District and APS permission to temporarily collect property taxes after the state’s rejection of the county tax digest stalled tax collection.

The plan includes possible furlough days for some or all employees. APS may also have to delay repayment of a $100 million loan the district was forced to take out after the Fulton County property tax freeze delayed tax collection, a press release said.

The state Department of Revenue found problems with the tax digest submitted by Fulton County and rejected it, meaning the county cannot send tax bills to residents until the tax digest is corrected and the state accepts it.

Atlanta Public Schools, Fulton County and the Fulton County School District are asking the courts for permission to temporarily collect property taxes while the tax digest is corrected. A court hearing is scheduled for Nov. 3, but a ruling may not be issued that day.

Sixty-two percent of APS revenue comes from county property taxes, and the freeze and the subsequent tax digest rejection has meant the district has not received any property tax revenue four months into the district’s fiscal year, a release said.

The Fulton County Commission voted to freeze residential assessments at 2016 levels in July after residents expressed fear and frustration about a rise in property assessments,

This reduction in assessed value meant APS had to plan for $4 million less in revenue, according to the release. The freeze also delayed the tax collection process by more than two months and APS had to seek a $100 million loan with an anticipated cost of $470,000 in interest and fees, the release said.

APS may have to delay repayment of the loan if the court does not allow the districts to begin collecting taxes, Meria Carstarphen, APS superintendent, said in the release. The loan and interest must be repaid by the end of the year.

APS has also had to modify payment schedules for contractors and is considering furlough days for all employees, the release said.

“This means that we will delay payments for goods and services until right before the bill is due,” Lisa Bracken, the APS chief financial officer, said in the release. “We need to carefully monitor our cash flows until revenues from the tax digest start coming in.”

The district is also considering delaying until January the one-time $500 payment promised to non-teaching employees.

The Fulton County School District said in an earlier press release that the delay in sending tax bills is jeopardizing the school district’s ability to pay employees and meet other financial obligations.

“Fulton County Schools is now at the end of October with no idea of when it will get money,” the press release said.

“The delay in property tax revenue puts our district in the difficult position of having to worry about how we will pay our 14,000 hardworking employees,” Linda Bryant, the president of the school board, said in the release.

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