Two major public school systems are taking legal action after the Department of Revenue rejected a tax digest for the county earlier in the month - leading to questions of how the systems would pay their thousands of employees.
Both Atlanta Public Schools and Fulton County Schools officially filed a request for the courts to intervene in the process to allow the district to collect property taxes following recent news from the Fulton County Commission that the Department of Revenue didn't approve the 2017 tax digest.
Earlier in the summer, the Fulton County Commission froze a portion of the tax digest for reassessed residential properties at 2016. This followed a public outcry over what were expected to be massive tax increases on properties across the county.
But a spokesperson for Atlanta Public Schools said that an initial delay and decision by the Fulton County Commission forced the county tax assessor's office to recalculate property assessments and notices before resending notices.
"This delay caused the district to need to seek a $100 million Tax Anticipation Note (TAN) with a real cost to the district of more than $470,000 in interest and fees," APS said in a statement late Monday.
The TAN is essentially a short-term loan issued by states and municipalities to finance current operations before tax revenue is received.
Both school systems in the county are warning that the delay will have major implications on the district and other municipalities that are dependent on those tax revenues. The school systems are already working through potential cash-flow issues that could arise and slowing down outgoing cash flow.
“This means that we will delay payments for goods and services until right before the bill is due,” said Lisa Bracken, Chief Financial Officer. “We need to carefully monitor our cash flows until revenues from the tax digest start coming in.”
In a statement from APS Superintendent Meria Carstarphen, she said they are hoping for positive news when the courts hear their request on Nov. 3.
“In an abundance of caution, however, we are developing a contingency plan that could include implementing furlough days for some or all employees, delaying the $500 one-time payment until January for employees not on the teacher salary scale and identifying ways to delay repayment of the district’s TAN in the event that we are unsuccessful in convincing the courts to intervene,” Carstarphen said.