“Looming Deficits” versus “Quality Education”

Over the past three decades Cobb County and the State of Georgia as a whole has seen an explosion of growth in population. Correspondingly, with the massive increase in students our school systems have had to address the additional needs (new schools, facility upgrades, buses etc., teachers, staff and other resources) and their associated costs. Initially the funding necessary to accommodate the expanding school population explosion was insufficient and school systems had to turn to the only vehicle available, school bond referendums. Recognizing this highly expensive funding alternative, with its high interest rates and the long term debt consequences associated with bond indebtedness, the State Legislature authorized and the voters approved a State Constitutional Amendment allowing local school boards to present to local voters for their approval, S.P.L.O.S.T. referendums as a Pay-As-You-Go system. This funding was restricted to only capital expenditures and could not be used to supplement operating costs.

The annual school system Operating Budget (that funds only school operations), is developed around “projected revenue and projected expenditures” and School Boards are required by law to adopt balanced budgets based on those projections. The revenue sources that support the operating budget come from three areas, approximately half from State and Federal appropriations and the remainder from local property taxpayers. When the projected expenditures exceed the projected revenues deficits occur and choices must be made to bring them into balance.

A fundamental question needs to be asked and answered. Why are Cobb County and other school districts experiencing a financial crisis?

There are two major reasons that have brought about our massive deficits. First is the obvious; the tremendous down turn in the economy. This has had a very negative impact on property values throughout our County and the nation. Property assessments determine school tax revenue and any decline in those assessed values reduces tax revenue. Additionally, there has been a significant increase in home foreclosures which has also affected the school systems revenue stream. The county does not project any sizeable increase in property values for a number of years and until there is sustainable statewide economic growth a deficit crisis will continue. Another major contributing factor has been the implementation of the State of Georgia austerity cuts to education. Since 2003, The Cobb County School District, through the instituted austerity cuts to QBE, has lost almost $500 million dollars of anticipated State funding for the Cobb county school system. This has had a substantial negative impact on our school system and unfortunately these austerity cuts will continue for the foreseeable future.

It is important also to understand that approximately 90% of the Cobb County School District operating budget is personnel costs, (salary, benefits, etc.) for teachers, administrators, support staff, bus drivers, maintenance workers, security officers, etc. So when cuts must be made to balance the budget this dynamic drastically limits options available to Board Members. The result has been reductions in teacher and support staff positions (1400), coupled with unsustainable increases in class size, staff furloughs, and reduced programs.

Since 2009, the Cobb County School District has experienced ever increasing annual budget deficits. Last fiscal year saw deficits approaching $90 million dollars and there is no change to that trend in the foreseeable future. Unchecked, this will impact both the level and “Quality of Education”, placing both at risk.

Working with Mr. Don Hill and former Board member Dr. John Crooks, five possible options were developed that would provide adequate and sustainable funding in order to mitigate any potential risk to that quality.

In January, 2013, Senator Judson Hill, the Cobb and Fulton County Legislative Delegation Chair, was contacted to discuss these options. With Senator Hill’s assistance and input, those five were narrowed down to two. Both of the remaining options relied on a 1% Local Education Sales Tax, the main differences being in the structure of the authorizing legislation. With Senator Hill’s permission a meeting was held with Mr. Jeff Lanier of the General Assembly Legal Counsel’s office to determine the legal and legislative parameters necessary to draft the proposed legislation. After a review of the suggested criteria Mr. Lanier determined that an Amendment to the States Constitution would be required to provide authorization for local school boards to offer, for voter approval, local referenda establishing a Local Education Sales Tax.

Mr. Lanier drafted the initial version of the legislation and a meeting was held with the two Chairmen of the House and Senate Education Committees, Rep. Brooks Coleman and Cobb County Sen. Lindsey Tippins. The purpose was to solicit their input and recommendations which were incorporated into version 2. Both Chairmen recognized the funding plight of our school systems and showed interest in exploring ameliorative alternatives. Subsequently, meetings were held with the Executive Directors of the Georgia School Board Association and the Georgia School Superintendents Association. Both showed great interest and provided valuable suggestions that were included in the third version of the draft legislation.

Additional informational meetings have been held with state heads of the Professional Association of Georgia Educators and the Georgia Association of Educators as well as East Cobb County Council PTA (ECCCPTA), the District PTA Chair representing Cobb County, and many local groups. Meetings are being scheduled with the Georgia Chamber of Commerce, the Georgia Association of Realtors and the Georgia PTA group.

At the October 9th Board Work Session I presented the following statement.

The Cobb County School System has been experiencing ever growing budget deficits that have resulted in teacher positions being eliminated, classroom size increases, furlough days for teachers and staff plus the reduction in and elimination of certain programs.

The overall impact on the ability of our school system to maintain our high “Quality of education” and meet the community’s expectation for excellence as they relate to educational standards is now at risk.

Repeatedly, both this and previous Boards of Education have expressed to our Legislative Delegation, the need to financially address these debilitating funding deficits. Unfortunately, the response has not resulted in any meaningful resolution nor does there appear to be any expectation for future relief from the State Legislation.

This past year we saw an unprecedented deficit in the neighborhood of $86 million dollars. Because the Board is required by law to adopt a balanced budget we were again faced with the only recourse available, cut teachers, staff and services, institute furlough days while increasing class size and reducing programs.

Understanding that with the exception of State funding and a very small amount of Federal Funding, the only other funding source now available is through property tax revenues. We also know these are limited through a mandated State of Georgia cap on the maximum millage rate and fluctuate based on property assessments. This Board has recognized the dilemma and a number of members have publicly called for exploring alternatives that would provide both adequate and sustainable funding to ensure that “Quality Education” is not compromised in our school system.

Along with this call, several members of our community, who strongly support and are dedicated to high quality in public education, recognized the impact of these deficits are having on that quality, volunteered their time and resources in developing an alternative that would give local voters, within their school communities, the ability to decide, through referendum, what levels and “Quality of Education” they are willing to fund.

Each Board Member has been provided with copies of the draft Legislation that outlines how the initiative will be structured, its legal limitations and a summary of its benefits. We are asking that this Board vote in support of this alternative. This is a bold initiative but without relief the negative consequences to our school system could be devastating. We cannot continue kick the can down the road and place our school system and educational excellence in jeopardy.

A Resolution has been drafted and when the final draft is complete it will be presented to the Board for their vote at the October 24th Board meeting.

If you wish to read the actual Amendment documents then click on the following links
Amendment document:

Additions to Georgia Code referred to as “An Act”:

To make it easier to understand, we have developed a one page document which provides the major provisions.

Local Education Sales Tax Major Provisions (L.E.S.T.)

Why The Need

  • Inadequate school funding compromises the “Quality of Education”
  • The “Quality of Education” directly affects the “Quality of Life” within communities
  • Inadequate educational funding has cost the State of Georgia approximately 5,000 teacher positions over the past four years, reduced instructional time and increased class sizes at all grade levels
  • Lack of funding has placed Georgia’s “Quality of Education” at risk
  • Parents, taxpayers, and citizens need funding alternatives they control
  • “Local” education funding of annual school operating budgets is totally supported through property tax collections

What a Local Education Sales Tax Amendment Provides

  • L.E.S.T., through a Constitutional Amendment and local voter approval, provides Major Property Tax Relief and adequate supplemental funding of annual school system budgets to offset debilitating deficits
  • Voters, through local referendum, decide on the level and “Quality of Education” by providing adequate and sustainable supplemental funding to ensure that community educational expectations are met

Benefits derived from a Local Education Sales Tax

  • Counties with populations greater than 50,000 are guaranteed that a minimum of 30% of annual proceeds collected from L.E.S.T. will be returned to the local property owners in the form of Property Tax Relief.
  • Eliminates the deleterious deficits that are compromising the “Quality of Education” within the State of Georgia
  • Excess Proceeds from L.E.S.T. may be accumulated to offset future SPLOST capital needs
  • L.E.S.T. supplemental funding of local school budgets provides school districts the flexibility to direct funds where needed within the annual budget (no restrictions are placed on the allocation of L.E.S.T. proceeds for either operating or capital expenditures)

It is important to keep in mind that this Amendment does not increase taxes. It only provides the authority for a local school district to present to the local voters, for their approval or disapproval, a referendum to levy a 1% Local Education Sales Tax, for a specified time period, in order to address school budget deficits. Also contained in the Constitutional Amendment is a sunset requirement and guaranteed property tax relief to taxpayers, in Counties with populations greater than 50,000, that is equal to a minimum of 30% of the annual proceeds collected through a L.E.S.T. Remember, the final decision of any supplemental education funding is left to the voters within the school system, they decide the “level and quality of education” they desire.

Meetings with State-wide Organizations

  • With revised legislative documents, we met with the Georgia School Board Association, Ms. ‘Sis’ Henry, Executive Director, to present the proposed legislation and solicit their input and support.
  • Next we met with Georgia School Superintendent Association Executive Director Dr. John Zauner to make a presentation and share recommendations from the GSBA and receive his recommendations.
  • Recommendations from the GSBA and GSSA were forwarded to Mr. Lanier for revision resulting in document LC 28 6832 and LC 28 6826.
  • These legislative documents, along with a one page major provisions document, have been formally presented to the Georgia Association of Educators. Their reaction was positive and we expect their state-wide support.
  • Subsequently, we have made a formal presentation to PAGE, the Professional Association of Georgia Educators. Again, they recognize the need for school funding and indicated strong interest in this potential legislation.

Informal discussions of this proposed legislation has been with Educators First, East Cobb County Council PTA (ECCCPTA), the District PTA Chair representing Cobb County, and many local groups.

Future Meetings in Progress
Georgia PTA
Georgia Chamber of Commerce
Georgia Association of Realtors

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