The Gainesville school board tentatively adopted a slightly lower property tax rate Monday, but it remains to be seen what net effect it will have on city homeowners’ tax bills.

State legislators eliminated the Homeowner’s Tax Relief Grant, which may mean taxpayers will pay more this fall despite the school board’s millage rate decrease.

Gainesville city officials could not be reached following the school board’s late board meeting to determine the net effect for the average homeowner.

A unanimous board vote tentatively reduced the system’s millage rate from 7.81 mills to 7.71 mills. One mill is equal to $1 for every $1,000 of assessed value.

The reduced millage rate tentatively means $353,031 less in tax revenue for the school system, according to Gainesville school system documents. Documents showed that if adopted, the tax rate would produce $27.2 million for the system.

Superintendent Merrianne Dyer said the small property tax decrease is possible for the system because it is running a much smaller deficit than expected at this point.

The system recently learned its deficit is roughly $780,000, not the $3.4 million it was originally though to be. The discrepancy was a result of an accounting error in the city’s calculation of the school system’s debt service, Dyer said.

The board is proposing it charge taxpayers .09 mills less in debt service than last year and .01 mills less to fund maintenance and operations, Dyer said.

School board Chairman David Syfan said even though the board is still running a deficit, he feels an obligation to citizens who are struggling financially to reduce taxes.

"We still have a deficit, but due to the actions we took in the prior year ... and assuming that the state doesn’t further drastically reduce our funding, we should totally eliminate the deficit at the end of this fiscal year (June 30, 2010) even with the reduction of the millage," he said.

Dyer said the board is anticipating another 3 percent budget cut from the state this spring and has planned accordingly. In August, the state announced a 3 percent budget cut for public education.

Syfan said the board aims to restore worker pay cuts as soon as the system eliminates its deficit. This summer, the board cut all employees’ salaries between $10 and $75 per month, and cut their own salaries by 10 percent and Dyer’s by 2 percent.

The board will adopt the final millage rate at noon on Oct. 7 at the Gainesville schools central office at 508 Oak St.