ATLANTA, Ga. — Fears of falling revenues from the COVID-19 pandemic have relaxed as Fulton County School System closes out the current year and looks ahead with cautious optimism.
A return of consumer consumption, along with a significant infusion of state and federal funds, kept the district financially sound this year, district officials say. Next year, local tax receipts are expected to continue rising.
“Financially we're not where we could be [without the pandemic], but we're not as bad as we initially thought,” said Marvin Dereef, chief financial officer for Fulton County Schools.
As the district prepares for fiscal year 2022, which begins July 1, preliminary projections call for an overall budget of $1.04 billion, a decline of $7 million from the current year.
Funding projections for the coming year are based on the current millage rate for Fulton County taxpayers to remain unchanged. Taxpayers would still see a school tax increase if the value of their property has risen.
Fulton County Schools relies on local tax dollars to fund about 67 percent of its budget. State funds provide the rest. For fiscal year 2022, Dereef projects local tax revenues of $675 million, up from $659 million this year.
Not counting recent federal stimulus funds tied to COVID-19 recovery, federal funding accounts for a small portion of the school district’s operating budget, comprising less than 1 percent of the overall district budget. Federal dollars are used primarily for special education and school nutrition.
In determining state funding for its 180 school districts, Georgia uses the Quality Basic Education formula, or QBE. For 2022, Fulton County Schools anticipates it will receive $343 million from the state, a decline from $376 million this year. Much of the loss is attributed to declining student enrollment, which next year is expected to fall by 3,400 students.
Dereef said other challenges to the upcoming budget include increases in local fair share and to the Teacher Retirement System, and continuing austerity reductions.
As one of the state’s wealthier districts, Fulton County Schools will also see its “local fair share” rise from $196 million this year to $208 million next year as tax revenue goes up in the county.
Local fair share is the required five mills every district must contribute toward its QBE allocation. One mill in Fulton County raises nearly $40 million. This means over $200 million in state funding will be deducted from what the school system “earns” next year.
On the flip side, less wealthy districts with lower tax revenue can apply for equalization grants that are essentially funded by the fair share from wealthier districts.
Contributions to the Teacher Retirement System will go up $4 million in fiscal year 2022.
The last major budget component is the continuation of the austerity reduction. The process allows the state to balance the budget by reducing the amount a district earns under the school funding formula. Since 2002, Fulton County Schools has seen approximately $400 million cut from state funding it earned through QBE.
Last year, all school districts had a 10 percent across-the-board austerity cut, which equated to $40 million withheld from Fulton County Schools. The state restored 60 percent of the cuts this spring, leaving only $16 million withheld. It is expected the state will continue the $16 million austerity reduction in fiscal year 2022.
The Fulton County School Board will vote on the tentative budget May 13. Final adoption is scheduled for June 8.