DALTON, Ga. — Dalton property owners could see an increase in taxes to fund schools even though a draft budget presented to the Dalton Board of Education recently contains no millage rate hike. In that draft, the school system’s property tax rate would remain at 8.2 mills, the rate for the past four years.

The increase in taxes could come from a bond referendum approved by city voters that created a separate property tax to pay off the $46.89 million the school system will borrow to build a new sixth- and seventh-grade school. School officials have said that tax will be at least .4 mill, or about $50 on the average $125,000 home.

Chief Financial Officer Theresa Perry said the tax will show up as a separate item on Dalton property owners’ tax bills.

“We have not incurred a general obligation bond in a while, probably 30 years, so people have not seen this for a while,” she said. “I believe we can work with the tax commissioner’s office to make sure that it is clear this is for school system debt. It’s sort of technical, but we will have two different (tax) rates.”

The first draft of the fiscal year 2019 budget calls for some $77.158 million in spending, up from $74.766 million in fiscal year 2018, which ends on June 30. It was presented to board members at a board retreat last week.

Perry says some $1.6 million of that $2.4 million increase would be from increased contributions to the state teachers retirement system.

“The teacher retirement system has its own board,” Perry said. “They have looked at actuarial studies on future costs and have decided the current amount of money coming into the teacher retirement system needs to be increased to cover those costs.”

The retirement system has increased the employer contribution to the system to 20.9 percent of salaries from 16.91 percent. The school system paid $5.5 million into the retirement system last year.

The draft budget also calls for an extra $134,000 for energy.

“We had problems with one of our elementary school’s meters. Dalton Utilities got to the bottom of that, and the meter is now properly functioning, and we are being billed correctly. We are incurring higher costs, but it’s not just that meter. We have some square-footage increases with mobile units and some rate changes as well,” Perry said. 

The draft budget forecasts some $75.023 million in revenue, up from $74.525 million in the current fiscal year. About $54 million of that will come from the state.

The draft budget would have the school system run a $2.135 million deficit, which would draw its fund balance down to $11.815 million from $13.95 million.

Perry says the state recommends school systems keep a maximum fund balance of 15 percent.

“We are looking around that number. Fifteen percent of this budget would be $11.5 million,” she said.

But Perry says those numbers are based on forecasts of state revenue.

“For us to go any further (with budget planning), we really need to know what our revenue will be,” she said. “I’m not sure exactly when that will happen. That depends on the legislative process.”

Last year, the school system received about $2 million more in state funding than originally forecast because the Legislature provided more funding for education.

The Legislature generally wraps up its session by early April and Perry said officials should know by late March or early April how much funding the system will receive.

In the meantime, Perry and other school officials will begin putting together a second draft budget based on comments from board members at the budget retreat. Adding teachers in the elementary schools is a priority for board members.

“We want to get our student/teacher ratios down,” said board Chairman Rick Fromm.

The school system is currently operating under a strategic waiver that exempts it from the state’s maximum classroom size. It is operating at two students above the maximum class size, which varies by grade.

Getting to one student above the maximum at the elementary level would require the addition of five teachers at a cost of $371,500, according to data presented to the board members.

Perry said she hopes to have a second draft of the budget for board members by early or mid April.

“I am looking forward to continuing to refine our priorities as a board, discuss areas to reduce spending and arrive at a budget that starts to align with the strategic plan we are developing,” said board member Matt Evans.

“We will discuss the budget again at that point,” said board member Tulley Johnson.

By law, the board must hold two public hearings before adopting the budget.

“We are recommending they hold hearings in April and May and in May adopt a tentative budget,” Perry said. “We would advertise the tentative budget, and in June at their regular meeting they would adopt a budget.”