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City Schools of Decatur: tax breaks cost system $4.3 million annually

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City Schools of Decatur: tax breaks cost system $4.3 million annually


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A city schools of Decatur bus. Photo from CSD Facebook page.

City Schools of Decatur is starting to get the full picture of what a tax break for seniors approved in 2016 will cost the school system.

That tax break, combined with all of the others residents currently receive, amounts to an annual loss of $4.3 million, a CSD spokesperson and Superintendent David Dude said. The school homestead tax exemption approved in 2016 applies to seniors 65 and older, saving seniors $993 on every $100,000 of their home’s value.

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Initial estimates showed that that CSD would lose $1.2 million under the tax exemption approved in 2016. Revised estimates show that number will be $1.63 million. A year ago, Dude said there were two homes worth more than $1 million who qualified for the tax break, resulting in a tax savings of more than $11,000 a year. He also said the new senior tax exemption would cost the school system $2 million, so the $1.63 million estimate is slightly better than what he initially thought.

The tax break remains popular, however. The number of people using the tax break has increased.

“From 2016-2017, we had 555 additional properties (1027 to 1582) take the senior exemptions,” CSD spokesperson Courtney Burnett said.

To see a full list of tax exemptions available to Decatur property owners, click here.

CSD leaders hope fewer seniors leaving Decatur will mean less families moving into those houses and an overall cost savings for CSD because it will be cheaper than the cost of educating students. Educating students costs CSD more than $10,000 per child.

The tax break has a five-year sunset clause, and the School Board will have to vote to renew it. It was put in place in case the number of seniors taking advantage of it cut too deeply into the school system’s revenue.

Even with the senior exemptions, CSD is expecting a revenue increase. A recent draft of the budget for Fiscal Year 2019 shows the school system is anticipating $63 million in revenue in Fiscal Year 2019. Last year, the school system budgeted $60 million.

CSD is currently projecting $69 million in expenses and the budget draft projects a deficit of $6.4 million. In a recent interview, CSD Finance Director Susan Hurst said the school system always budgets revenues conservatively and they almost always come in higher than expected.

“It’s basically a worst case scenario,”she said. “It doesn’t factor in the projections of how we’re going to end the year this year.”

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