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Gainesville school system proposes 15 percent property tax rate increase

POSTED: May 31, 2008 5:00 a.m.

To begin the climb out of a deep financial hole, Gainesville school officials are recommending raising the property tax rate by 15 percent in fiscal year 2008-09, which begins July 1.

"We should have increased (the rate) last year, but we didn’t have the accurate data to make this decision," said Superintendent Steven Ballowe in a budget presentation to the Gainesville City Board of Education Monday night.

He was referring to financial issues cropping up under the watch of the previous financial chief, Angela Adams, including a drastic thinning of revenues and a challenging conversion to new accounting software.

"We were smiling broke," said board member Willie Mitchell of that period. "... We were all getting good news when (the news) was bad."

Janet Allison, the district’s financial chief, said she projects that the city will have a shortfall of $6.5 million to $7 million by June 30, or the end of the current fiscal year.

Ballowe proposed increasing the tax rate to 8 mills from 6.94, with 1 mill equal to $1 for each $1,000 in property value. He said the owner of a $150,000 home would see a $207 increase in the tax bill.

The tax increase could raise $3.5 million next year. To balance next year’s projected $52.6 million budget, the district also is looking at some $4.5 million in cuts, including not filling some vacant positions.

The district also is looking at eliminating the Phoenix Academy, which was started several years ago to address the academic needs of recent school-age immigrants with limited formal schooling from their home country.

The number of students in that program has dwindled from 30 to 40 when it started to seven last year, Ballowe said.

School officials are proposing to add four positions at the elementary level to deal with growth, he added.

Next year’s budget could produce a year-end surplus of nearly $4 million, particularly if it receives the same midyear adjustment it received this year from the state, or $1.6 million.

The surplus, however, would go to relieve the deficit.

"It’s going to take us two years to get back into the black and several more years to build the kind of surplus we’d like to see," Allison said.

As it is, the board voted to pursue a "tax anticipation note," or short-term loan of about $5 million to carry the system into the next fiscal year.

"We have an immediate need for cash," said Allison, noting that she would know a more exact loan amount today.

She said the school system, by law, must pay off the note by Dec. 31.

Governmental bodies typically pursue such notes to take care of bills until they begin receiving property tax money and other revenues.

"We’re in a bad financial situation, but I don’t want it to negatively affect the instruction of our children," said board member David Syfan.

Ballowe produced charts that showed Gainesville as "among the lowest spending (districts) in the state" while having one of the highest academic records — including the sixth highest Georgia High School Graduation Tests scores in the state and a graduation rate that could reach 90 percent this year.

He assured the board that, despite the grim financial numbers, "we’re not going to miss a beat" in the operation of the system.

"You won’t impact instructional programs, testing accountability, and teaching and learning," Ballowe said. "We won’t impact class sizes."

Still, school board members were bracing for difficult times.

"We can’t have waste," said Kelvin Simmons, a member of the board. "If we don’t need it, we don’t need it."

The budget discussion followed a time when board members had to approve some much-needed projects, including new air-conditioning compressors and roofing work.

As part of a vote to approve spending $4,750 on resodding and irrigating the practice field at Gainesville High School, May board chairman Sammy Smith asked Keith Vincent, the district’s maintenance and transportation director, to "check every potential sources and fund for (financial) help."

The board plans to approve a tentative budget on June 2 and a final budget on June 16.


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