As reported by Mark Niesse at the AJC today:
The Atlanta Beltline project has delayed making a payment due to Atlanta Public Schools, creating an $8 million hole in the school system’s budget.
Property tax revenue … has fallen short of expectations … It was set to pay APS nearly $2 million last January and owes another $6.75 million in early 2014.
[They] have asked APS to renegotiate those payments and terms of their 25-year, $162 million agreement … While school leaders say they’re open to changing the fee agreement, the district had counted on $8 million from the Beltline in its tentative 2014 budget passed earlier this month.
Boom! The hammer is falling!
Over the course of the last several years – including FY14 – the Board has refused to adopt a budget that was balanced. In fact, the last several budgets have relied on “one-time revenues” and significant deficit spending.
How is this going to be fixed? The AJC also notes that:
The school board will meet Tuesday to decide how to balance the budget, something APS Superintendent Erroll Davis said he’s confident can be done even after searching for any bit of savings over the last few months.
“It’s an almost $600 million budget,” he said. “We can find the money.”
Well, this is interesting in a couple of ways.
First, before the loss of $8 million Belt Line payments, the FY14 Budget is not “balanced” – there is a $21.5 million deficit that is depleting the General Fund reserves.
Second, as I have noted before, Davis has said in the past that we can always find a couple of million in a $600 million budget – it looks like that threshold has now increased from $2 million to $8 million!
When parents were begging for an additional $5-7 million to reduce the class size waiver to a maximum of three, the best that could be done was to find $400 – 500 thousand in “savings” (which in fact was an initial budget overstatement – not a “savings”) and increase the deficit by another $1.5 million. Now it seems that finding $8 million – because they have no choice – is possible.
This tells us a lot about the administrations priorities. The chickens are coming home to roost – and when they land, it will not be pretty.