 UPDATED:
03/02/2008
Forsyth County Schools
Summary: An analysis of
the millage rates of the Forsyth County School system presents an unusual, if
not unique study of how a government agency can accurately estimate property tax
revenue, and then apparently match expenditures to fit the available funds.
For 2005-2006, the school system
has an operations budget of $180,212,483. Of that amount, $93,422,988 must come
from property tax revenue. In addition, the school system pays 2.5% (an
estimated $2,395,460) of total collections to the county for collection
services.
If Forsyth is like most school
boards, it doesn't include this fee as a line item in the budget because it
comes "off the top" of actual dollars collected*. It is apparent, however, that
school officials do factor it into the overall calculation.
The School Board has adopted a
millage rate of 14.708. The mathematical millage rate, however, is
14.340. But when you factor in the collection fee, the adjusted mathematical
millage is 14.708, the rate adopted by the board. There is no
overtaxation or undertaxation; at least, not on paper.
In the previous three fiscal years, the School Board adopted the same rate,
15.50. In two of those three years, the mathematical millage as adjusted
for the collection fee is also 15.50.
The fact that the Board has
adopted the same 15.500 until this year is evidence that the School Board is not
"doing the math." It is highly unusual, if not mathematically impossible, for
the adopted rate and the adjusted mathematical rate to remain the same over this
time period.
From 2002 to 2005, the net tax
digest grew annually by 4%, 8% and 12.8%. The portion of the budget to be funded
by tax dollars over the same time period increased by roughly 3.9%, 8.6% and 7%.
It would be a mathematical miracle for the Board to manipulate increases in both
the net tax digest and the budget such that the millage worked out to an
even 15.50 each year. Unless....
The Forsyth School Board is
apparently matching expenditures to projected revenue. Here is how it works--
The Tax Commissioner's office is
updating individual property values and the tax digest in general throughout the
year, in preparation for tax billing in November and/or December. Because the
system's fiscal year runs from July to June and the millage is set late in the
year, the finance department has a fairly accurate net tax digest number to work
with.
It is not difficult to estimate,
based on the actual growth in the digest, how much revenue a particular millage
rate-- in this case 15.50-- will generate. The School Board, desiring no
increase in taxes but more than willing to maintain the same rate, matches
proposed expenditures to expected revenue.
In other words, the Board does a calculation based on projected revenue:
"With the growth in the tax
digest, we're going to bring in XX more dollars with a millage of 15.50. Let's
figure out how to spend it."
If the Forsyth County School
Board is matching expenditures to expected revenue it illustrates the
fact that, even with a mathematical millage, it is incumbent on the taxpayers to
closely monitor elected officials.
A mathematical millage does not
guarantee that public funds are being spent wisely. It only ensures that the
government takes no more and no less money from the taxpayers than is required
to fully fund the budget that is formulated and approved. It remains the
responsibility of the taxpayer to insist that their representatives hold the
line on expenditures and return the benefit of a growing tax digest to the
people in the form of a lower millage rate.
Millage History
- 2002-2003: 15.50
- 2003-2004: 15.50
- 2004-2005: 15.50
- 2005-2006: 14.708
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*This assumption has not been confirmed.
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