Court rules Fulton County tax bills can go out, opening revenue stream

6:28 p.m Friday, Nov. 3, 2017 Local
Attorney Charles Huddleston (right) and Meria Carstarphen, superintendent of Atlanta Public Schools, thank Judge Alan Harvey after his ruling. Fulton County court, DeKalb Judge Alan Harvey agreed to allow Fulton County to collect tax money after a plea from Fulton County Attorney Patrise Perkins-Hooker. The decision affects the cash flow of two school systems, 15 cities and Fulton County government. It stems from commissioners’ decision to freeze property taxes when values rose. BOB ANDRES /BANDRES@AJC.COM

Applause broke out in a courtroom Friday, after a judge granted Fulton County permission to send property tax bills to its residents. But the local officials who praised the decision, saying it forestalled drastic cuts, quickly warned school furloughs and government belt-tightening would still come.

DeKalb County Judge Alan Harvey said in Fulton County Superior Court that it was “abundantly clear” that the criteria for requesting a temporary collection order had been met. He granted the county permission to send tax bills based on the 2017 assessments, which in many cases are based on 2016 values, as attorneys requested, in order to prevent further delays.

Patrise Perkins-Hooker, the county attorney who argued the case, implored Harvey to grant the order, saying it was a “very critical and time sensitive matter.” Even once tax bills are sent, she said, the school systems and her own government might have trouble paying their bills “unless revenues stream in very quickly.”

“We all desperately need your help in order to avoid immediate and irreparable injury,” she said.

The deputy in charge of current taxes in the tax commissioner’s office, Gladys Bradfield, ran out of the courtroom as soon as the decision was announced in order to start the process of printing nearly 350,000 tax bills, Fulton County Tax Commissioner Arthur Ferdinand said. He said printing would take place “around the clock” beginning Friday night, and his his employees “are ready and they’re good and they’re disciplined.”

Ferdinand said he will take steps to encourage people to pay, in part by telling them “what’s at stake here for our kids and schools.”

“I will appeal to their sense of public conscience,” he said. “We’ll make an extra effort.”

Property taxes would ordinarily have been paid by now, but Fulton County slowed the process when county commissioners this summer froze most residential values at 2016 levels after residents complained of higher-than-expected property assessments. That decision required new assessment notices to be sent, and resulted in government tax rates that were set later in the year.

The county had to go to court, though, when the state Department of Revenue rejected its tax digest last week. The temporary collection order Harvey granted allows Fulton to bring in tax revenue while it works with the revenue department to fix the problems with its digest. The department questioned whether the county was allowed to freeze values at 2016 levels, an action it took based on a law from the 1880s.

Fulton County and its two school systems — Atlanta Public Schools and Fulton County Schools — all said they will be monitoring their finances day-by-day as tax bills go out Nov. 15 and money starts to come in.

APS will furlough select staffers but will do everything it can to keep schools open, said Superintendent Meria Carstarphen. It will likely close down the central office during the Thanksgiving week.

“While this ruling is great and we have a lot of strategies in place to help us get back on track I don’t think it’s going to be enough to get us to the finish line,” she said.

Fulton schools will maintain previously announced spending cuts, a hiring freeze and a moratorium on field trips. Furloughs in that school district remain a possibility, depending on how quickly money is received in the remaining weeks of this year, but Superintendent Jeff Rose said the district will do what it can to avoid them.

“We are not out of the woods. Today was a big day, however we have some other hurdles to overcome,” Rose said. “Our goal between now and break will be to maintain our days. We can’t guarantee it yet.”

Sharon Whitmore, Fulton County’s chief financial officer, said she needs to collect between 28 and 30 percent of the total tax money the county is owed by Dec. 23 if the county is going to meet its obligations. That includes a $200 million loan that must be paid back by Dec. 29.

“I’m pretty confident we’re going to come really, really close,” Whitmore said. “It’s going to be a juggling effort as we get through the end of the year.”

In a normal year, Ferdinand said, about a quarter of the tax money comes in a week before the due date, and the rest follows steadily after. In Atlanta, tax bills will be due Dec. 31. In the rest of Fulton County, they will be due Jan. 15.

Because some people may want to pay their taxes before they shop for Christmas gifts, or in order to take advantage of the federal property tax deductions, Ferdinand said he expects more people may pay their taxes when their tax bills come. Those that do not pay property taxes this year may pay more in federal income tax.

“I will appeal to their sense of public conscience,” he said. “We’ll make an extra effort.”

Ferdinand’s office will send payments to the school systems and local governments on a weekly basis, but Whitmore said the county may still need to take out a short-term loan to cover January expenses if money does not come in quickly. Still, she said, the ability to send tax bills is “a tremendous relief,” even as the county continues to evaluate its spending.

Still, finances will remain “tight,” said Bob Ellis, vice chairman of the Fulton County Board of Commissioners, who said it’s “unfortunate” that the decision to allow tax bills to be sent came down to the wire.

APS will be required to make “sacrifices” even with the positive outcome of Friday’s hearing, Carstarphen said.

The district has yet to determine how many employees will be furloughed and how many days off they will take. Carstarphen stressed the goal is to schedule days off “when kids are not in school.”

Because of the months-long tax collection delays, APS took out a $100 million loan to cover its expenses. That loan must be repaid by the end of December.

To make ends meet, APS will continue to pay off invoices at the last possible moment. The district will wait until it has more money to give non-teaching employees a one-time $500 payment it promised them in lieu of a raise.

It also will freeze hiring and out-of-system travel, defer unfunded pension payments, and negotiate delayed payments to charter schools.

“I think folks should know that we are going to do everything in our power to ease the burden first and foremost on our students and then our staff,” said Atlanta school board chairman Courtney English.

Rose plans to provide Fulton school employees with regular updates and any additional cuts that might be needed.

He and Carstarphen called on leaders to use this year’s debacle as a lesson.

“For Atlanta Public Schools, for the turnaround that we have to do, for the challenges we have in our district — it is just irresponsible for anyone to create a barrier like this for a child who needs us to do the best job ever in the history of the system,” Carstarphen said.

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