DALTON, Ga. — For the sixth straight year, Dalton Public Schools officials expect to maintain a millage (property tax) rate of 8.2 mills, but tax revenues are expected to increase by 0.95% through rising property values.

Maintaining the existing millage rate will allow the school system to build on its fund balance in anticipation of increased costs of operations for the under-construction Hammond Creek Middle School, officials said.

“The board (of education) is looking at a lot of factors when making this decision that go beyond just one fiscal year,” said Chairman Matt Evans. “Ultimately, we have stated that one of our fiscal priorities is to open Hammond Creek Middle School in 2021 without increasing the millage rate. One of the chief reasons that we are allowing our fund balance to grow is to cover the startup and initial operating costs of this new school.”

The board held two public hearings on the millage rate and its impact on Monday. Even though the millage rate is not increasing, tax collections will rise, and technically, according to state law, that is viewed as a tax increase.

“It is the staff’s recommendation to the board to maintain the current millage rate,” said school system Chief Financial Officer Theresa Perry. “Because there is inflationary growth due to reassessments of property values, that is why we are having the public hearings.”

The school system will have a third public hearing on Tuesday at 5:30 p.m. in the council chambers of City Hall, after which the rate is expected to be approved during a board meeting.

The school system’s taxes are a combination of the 8.2 millage rate and a 0.57 mill for debt servicing that was part of a voter-approved bond referendum to fund Hammond Creek, the new school for sixth- and seventh-graders. The language of the bond referendum dedicated “at least .4 mills” to be specially allocated to debt payments on the bonds.

The combined 8.77 mills is what property owners in the city will see when their property bills come due. According to the school system, a property owner with a fair market value of $125,000 would see an increase in school taxes of $10.44.

“We’re not changing the millage rate and maintaining, but because there is growth in average values, property taxes rise,” Perry said. “The reality is there are people who are higher than 1 percent and some who saw no change in property value and some who saw declines.”

In June, board members unanimously approved an $84.8 million fiscal year 2020 budget, up from $81 million in the fiscal year 2019 budget, that anticipated no change in the property tax rate. The 2020 fiscal year started on July 1.

The budget anticipates $83 million in revenue, up from $80 million in the 2019 budget. The school system will reach into its fund balance to cover the difference between revenue and spending. The budget forecasts ending the 2020 fiscal year with a fund balance of $16.3 million.

State funding for Dalton Public Schools will increase by nearly $4.2 million to fund $3,000 pay raises for teachers and other certified staff. The state budget approved by the legislature earlier this year provides funding for a $3,000 pay increase for teachers, counselors and other certified personnel. The budget projects that that tax rate will bring in $32.6 million, up from $31.6 million thanks to growth in the tax digest.

Perry said the goal is to have a fund balance equivalent to 15% of the operating budget, which would equate to between $12 million and $13 million. Perry said the school system currently has $19 million in the fund balance.

Evans said board members had looked at rolling back the millage rate to 8.15 mills, but chose to maintain a more conservative approach.

“During this budget preparation cycle, the board has discussed the possibility of lowering the millage rate,” he said. “This year the amount of assessed property values being appealed seems to be higher than normal which adds uncertainty to our budget projections. We are also facing some uncertainty around the amount of state equalization funding that our district could receive.”

In other business at this week’s board meeting, members voted 5-0 to approve elevating Evans to chairman to replace Rick Fromm. Fromm announced at the July meeting that he would not seek re-election and would step down as chairman.

Staff writer Charles Oliver contributed to this report.