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Our Views: The $8 million question
Why did Gainesville school leaders let budget run into the red?
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It's bad enough that the prices of everything from gasoline to food are going sky-high. But now comes the Gainesville City Board of Education with the double whammy: a tax hike to help it climb out of a $7 million budget deficit. And for reasons we've yet to hear explained to anyone's satisfaction.

The board is proposing to raise the property tax rate more than 20 percent for fiscal year 2008-2009, which starts July 1. (We've erroneously reported it was a 15 percent increase based on incorrect information provided by a source.)

Such a hike would add $207 more to the tax bill of the owner of a $150,000 home. At a time when costs are rising for everyone, that's no small chunk of change.

Of course, higher taxes don't just hit homeowners. Renters likely will see their costs go up as property owners must pass along their higher tax bills. And businesses that must pony up more will pass it along in the form of higher costs for goods and services.

Did we say double whammy? Make it a triple whammy.

We understand that school systems are facing rising costs, for everything from fuel for buses to health care benefits for employees and more. Other systems are facing similar tax hikes to account for inflation and growth, including Hall County's.

But Gainesville's budget deficit is much larger, and apparently self-inflicted. And that has residents pretty ticked off. They want to know what happened to turn a $900,000 surplus into a $7 million deficit. That's $8 million of the people's money unaccounted for.

According to Superintendent Steven Ballowe, a letter from the city's finance department was sent to Angela Adams, then the system's finance officer, in March 2007. The letter warned of lower tax collections. Ballowe says school leaders never learned of the letter and didn't factor in the lower revenue stream when it set its 2007-08 budget.

Adams says she never saw such a letter, though new finance officer, Janet Allison, apparently found it in August 2007 after taking over the new job.

Of course, that was nearly 10 months ago. Why wasn't something done as soon as officials knew of the problem? Why did the system wait so long to reveal its financial problems to the public?

If the letter in question was discovered last fall after Adams left, and school officials knew that the money coming in wasn't meeting projections, they could have acted sooner and more decisively.

Freezing some expenses and jobs helps a bit, but not $8 million worth. More drastic moves were needed at the time, along with a full public disclosure of the newfound deficit.

In fact, the school board actually rolled back property taxes in October 2007 to account for an increase in property assessments, even though, by their own timetable, school officials should have been aware they were already facing a stiff deficit.

Instead, Ballowe and the school board banked on an infusion of state dollars to pull them out of the abyss. The state did provide a $1.6 million midyear adjustment, but it wasn't enough to keep the debt from getting deeper.

There's also the question of an annual audit. The system doesn't conduct its own audit each year, preferring to let the state handle it. Unfortunately, the state audit runs about a year behind, so any problem discovered by that audit has probably been exacerbated by the passage of time.

Had an independent audit been done months ago, other solutions might have been considered before a massive tax hike became necessary. There are dozens of accountants in the Gainesville phone book who could have done the job; all someone had to do was pick up the phone.

But in a fashion not unknown to elected officials at all levels, school board leaders are all too willing to force taxpayers to bear the burden for their colossal mistake. In short, they are saying, "We can't account for some of the money you gave us, so you need to give us some more."

That attitude is, at the very least, a tin-eared approach to accountability and responsible fiscal policy. It is, at most, gross incompetence. And someone needs to stand up and take the heat for it.

That person could well be Ballowe, who just last year received a new three-year contract worth more than $200,000 in salary and benefits. The size of his contract was said to be justified based on the system's strong performance, but it still rankled some residents who felt it was excessive.

No doubt, Ballowe has made tremendous strides in raising the city schools' performance over the years. But that success is just one key part of being a responsible public servant. Handling the people's money effectively is a key responsibility as well, and on that score, Ballowe and the board members have failed. They can pin the blame on Adams if they like, but everyone she answers to bears their share of it.

Ballowe said he trusted Adams' assessment of the budget, but trust isn't enough when dealing with the public's money. The system needs better safeguards to ensure that such a careless, incomprehensible error never occurs again

However late it may be, that audit still should be a top priority to determine just how deep the hole is. After that, the board should consider budget cuts of all nonessential expenses. Anything that can be trimmed back that does not directly affect students' academic performance should be on the table. And the tax hike should be abandoned until taxpayers get the answers they deserve.

It wouldn't hurt, either, at least symbolically, if Ballowe, the board members and other school system leaders volunteered to cut back on their own pay and perks until the system is out of the red. That won't make up $8 million, but if the system is going to ask employees, teachers, taxpayers and students to bear their share of the load, the administrators need to lead the way.

Despite a seemingly cavalier attitude, this is no small problem, made worse by an administration that seemingly doesn't know what's going on. If Ballowe's own timetable is accurate, the system knew 10 months ago of the problem and made no public disclosure of it nor took significant steps to remedy it. If that is accurate, Ballowe and his current financial advisers can point fingers at no one but themselves, and the city school board has some difficult decisions to make.

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