A complete rollback of the 2020 property tax rate is projected to leave Paulding schools with almost no extra money next year.
Chief Financial Officer Steve Barnette told the Paulding County School Board recently he is projecting the school district needed at least $15 million in new revenue from all sources in the 2020 budget merely to pay for enough teachers to allow the district not to increase class sizes.
“That’s no new initiatives — just sort of maintaining class sizes,” he said April 23.
The district is considering such new initiatives as a computer science magnet program at Hiram High School as early as 2020.
Barnette estimated state funding will provide new revenue of $10.6 million in 2020 compared to 2019. Local tax revenues likely will rise by about $8.9 million, including $6.4 million from property taxes on residences, he said.
But he also said he expected a decrease in state equalization grant funding in 2020 of about $300,000, as well as a decrease in some other local revenue estimated at $500,000.
All the expected increases and decreases combined equate to $18.7 million in additional revenue in 2020 if the schools part of the overall Paulding County property tax rate remains at 18.879 mills, Barnette said.
If the board chooses to approve a tax rate lower than 18.879 mills, the amount of new revenue will drop both from local taxes and an annual state grant, he said.
A rate of 18.5 mills will drop revenue from local taxes by $500,000. It also will decrease the amount Paulding schools receive in its annual state equalization grant by $500,000 because of the way the county’s amount is calculated, Barnette said.
If an even lower property tax rate is approved, the grant amount will be reduced as well, he said.
A full rollback of the property tax rate would drop revenue by $5.6 million and leave the schools with only $800,000 in additional local revenue compared to 2019, he said.
Paulding is classified as “low wealth” because its lack of an industrial and commercial tax base and comparatively high number of school-age children per household makes it more dependent on the state for its funding than the state average.
The county receives 67% of its school funding from the state compared to an average of 53% statewide, Barnette said.
Paulding school district receives about 10% of its funding from the state equalization grant created to give additional revenue to “low wealth” school districts in Georgia.
The grant is given to counties which are ranked based on a formula comparing the amount of its tax digest to full-time enrollment.
The tax digest is the assessed value of all taxable property in a county. Industrial and commercial properties typically are assessed at higher rates than residential.
If the tax digest drops but the enrollment increases, as it did in Paulding in 2013 following the Great Recession, the county is ranked higher and receives more grant money.
Likewise, if the tax digest rises but enrollment does not increase as quickly, the county’s grant amount drops.
The ranking also is based on how much the county is willing to contribute in local taxes, meaning a low wealth county’s ranking goes up if it approves a tax rate producing more revenue, Barnette said.
The board is expected to consider tentative approval of its 2020 budget May 14 with final approval before June 30.
Board member Jason Anavitarte said he encouraged those in county government considering no emphasis on economic development in coming years to reconsider such an approach.
He said more industry and commercial development reduces the tax burden on homeowners while allowing improvements to the school system.
Jobs-producing industries typically consider the quality of a local school system when seeking new locations.