Delay in tax collections puts schools in limbo

The Columbia County School System might need to borrow millions of dollars to remain financially stable, school officials said last week.

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A possible delay in collecting tax revenues might necessitate borrowing more than $20 million to continue paying personnel and bills until the system's share of tax dollars becomes available, schools Superintendent Charles Nagle told board members Tuesday.

The school system typically receives most of its local tax revenues in November and December, but House Bill 233, signed into law in May, freezes property tax assessment increases for the next two years and could delay tax collections this year by more than two months.

Nagle told the school board Tuesday that the county Tax Assessor's Office is awaiting a software upgrade to account for the reassessment freeze.

"We're sitting in limbo, because we cannot do anything until that's been resolved," Nagle said.

The amount of a tax bill is based on a property's assessed value. The Tax Assessor's Office usually sends out assessment notices during the second week of May, said Assistant Chief Appraiser David Clem.

"We plan, hopefully, to send out assessment notices shortly after the end of July," Clem said. "Our software vendor is working diligently right now to update the software program to accommodate the new law."

Caveats in the law prevent the Tax Assessor's Office from simply mailing the same assessment notices as last year.

Essentially, HB 233 imposes a moratorium on property assessment increases for the next two years. It does not freeze the value of properties that decrease in worth. Also, properties sold during the moratorium period are taxed at their actual value, not the frozen value.

The new law applies to all Georgia school systems, counties and municipalities unless their millage rates are capped, like Richmond County, Clem said.

School officials are not the only ones awaiting a completion to software upgrades.

"Our office is not on schedule with sending out tax bills because the Tax Assessor's Office has not mailed out the tax assessment notices yet," said Tina Laidig, a financial specialist with the Tax Commissioner's Office. "That's putting everything behind."

Once the assessment notices are mailed, the Tax Commissioner's Office must wait 45 days -- the time allotted for homeowners to appeal the assessment -- before sending out tax bills. The law allows property owners 60 days to pay the bill.

"For years and years we mailed out our property tax bills and gave 60 days to pay," Ms. Laidig said. "Nov. 15 has always been our due date. We have no idea at this point when they will be mailed."

The school system spends about $15 million each month on payroll, utilities and other expenses. Though it has a $26 million reserve fund, that money often is used to pay the system's expenses during the latter half of the year when tax payments from the state and county are typically low.

Officials dip into the reserve with the expectation that they'll replenish it with the large November and December payments. Last year, the school system collected more than $100 million in tax revenues during those two months.

With the reserve fund already low and the tax payments delayed, the board might have no choice but to seek a loan.

Though no immediate decisions will be made, Szablewski said that he doesn't believe the county commission will need to resort to the same drastic steps under consideration by the school board.