Mistake costs Atlanta schools $48 million, delays projects

Mistake costs Atlanta schools $48 million, delays projects
March 15, 2011
By Kristina Torres
The Atlanta Journal-Constitution

An unintentional paperwork error by the Fulton County school system will cost Atlanta Public Schools $48 million and force the city to delay several school construction projects, in some cases indefinitely.

Fulton officials didn't file a form that accurately reflected the enrollments of the city and county school systems, resulting in an overpayment to Atlanta from a 1-percent sales tax used for school capital needs.

Starting in August, Atlanta schools will make monthly payments until the amount is repaid, said Chuck Burbridge, the city school system's chief financial officer.

The mistake also increases the pressure on the school system as it explores whether to ask voters for a sales tax extension for another five years. Atlanta Mayor Kasim Reed has said the system should drop or greatly reduce its use of the sales tax when it expires next year.

Last month, Superintendent Beverly Hall told city school board members she wanted to pursue the full penny to fund $513 million worth of construction needs, including a new Buckhead elementary school and a new Midtown middle school. However, that figure was based on the incorrect numbers.

With the mistake corrected, Hall and her staff said Monday the city system will likely raise only $364 million over a five-year period, if voters approve a sales tax continuation. The city system still would have another $200 million of unfunded needs, Hall said.

Reed told The Atlanta Journal-Constitution last month that the penny tax -- which over 15 years has helped build or renovate 84 city schools or buildings, among other projects -- needs to be redirected to a regional transportation plan expected to be put in front of voters next year.

The mayor doesn't want the city school system to pursue the tax while voters consider the transportation tax. If both passed, the city would have the state's highest sales tax at 9 percent and be at a competitive disadvantage, he said.

Reed's solution is for the Atlanta system to pursue a "fractional tax" that, when combined with a presumed penny transportation tax, would keep the city's overall sales tax rate competitive with Charlotte's 8.46 percent.

The sales tax, formally called a SPLOST, for special-purpose local option sales tax, began in 1997 and has been renewed twice. Fulton County, DeKalb County and the city of Decatur all want a tax continuation. The three systems can't seek a referendum without Atlanta schools' participation.

The Atlanta school board is expected to decide in June whether to pursue a sales tax renewal, and, if that happens, the referendum will be put to voters in November.