[Update – The estimated revenue numbers for FY13 and FY14 were correctly state in the initial post, however, the post indicated that the revenue in FY14 would be up from FY13. In fact, the revenue will be down by $11.8 million – the post has been revised to note this change in wording.]
As noted in an earlier post, I am developing a series of questions on critical issues the new Board of Education will face in the upcoming year. In addition to the questions posed, I will also provide extensive background on the issue so that candidates can review the historical context and other factors that may assist them in developing their responses.
In addition, when the issue under consideration has come before the current Board of Education, I will also report the position taken by the five members who are seeking reelection – Amos, English, McDaniel, Meister and Muhammad.
I also want to thank Jarod Apperson – who reviewed a draft of this first installment – for his insight and thoughts on the issues the candidates face.
Background – The primary sources of revenues for the General Fund are local property, other local taxes and QBE revenues from the State. In total, these two components amount to 96-98% of total revenues for each of the last three years. The remaining 2-4% is composed of miscellaneous revenues (interest, tuition, rents, etc.); certain grants from the State, Federal or other non-governmental sources; and revenues from what are considered “one-time” or non-recurring revenues (TAD, E-Rate, BeltLine, real estate sales, etc.).
In addition, APS receives other revenues that are designated for specific purposes from Federal, State and non-governmental sources (Special Revenue Fund) and from SPLOST revenues (Capital Improvement Fund). However, since these revenues have specific designation, they are not available for use in the General Fund and are accounted for separately.
Property taxes – which represent the bulk of tax revenues collected – have gone down from $446 million in FY11 and FY12 to approximately $395 million in FY13 – a decrease of 11.6%. State QBE revenues – which are based on a formula established by the State – have increased over the last three years from $137.1 million in FY11 to $151.5 million in FY13.
When the QBE and local property tax revenues are combined, the total revenues from these two primary sources declined from $571 million in FY11 to $546 million in FY13 – a decrease of 4.4%. Currently, the revenue estimates for these components are expected to be [consistent with or] marginally higher in FY14.
When taking into consideration all General Fund revenue sources, total revenues in FY11 were $592 million and are anticipated to be approximately $580 million in FY13 – down approximately 5.5%. Currently the forecasted revenues for FY14 are $568.5 million –
up down slightly $11.8 million (2%) from FY13.
The Board of Education has little or no control over the amounts received by the Special Revenue Fund or the Capital Improvements Fund. However, the BOE has complete control on the amount of local property taxes that will be levied through the adoption of the property tax millage rate for both the General Fund and the Debt Service Fund.
The millage rate has remained stable for the last three years at 21.60 for property taxes. The value of 1 millage point is approximately $17 million in property taxes. In addition, last year the BOE raised the millage rate for the Debt Service Fund from 0.054 to 0.1 as the Fund was nearly depleted, resulting in an additional $1 million in property tax revenues.
Questions to Candidates
- Did you support the increase in the Debt Service Fund millage rate in 2012? As background, the BOE vote in 2012 to increase the millage rate was unanimous.
- Do you support the current BOE’s position to override the property tax millage rate “rollback” in 2013 and approving a resolution to leave the property tax millage rate at the same level as in FY13 (the result is an additional $6 million in property tax revenue in FY14)? As background, the BOE vote in 2013 to approve the resolution was unanimous.
- The current General Fund Budget for FY14 estimates that a $26.6 million deficit will be incurred. Do you believe that taxes should have been raised to cover the deficit or that expenditures should have been reduced to balance the budget? Or, if a combination of both, how much should taxes have been raised and how much should expenditures have been cut? As background, current candidate Meister (and two others not running) voted against approving the FY14 Budget due to concerns regarding the level of deficit spending. Current candidates Amos, English, McDaniel and Muhammad voted to approve the budget with the $26.6 million deficit in place.
- If faced with a similar deficit in FY15, would you consider raising property taxes or will you work to balance the budget solely with expenditure cuts?
As we go forward, I will be keeping a comprehensive list of the positions taken by the candidates and providing the information in summary form at a later date.