Editor’s note: Hans Utz formerly served as the Deputy COO of the City of Atlanta. He writes about local and national politics. He also served on the City Schools of Decatur’s Senior Homestead Exemption committee. He and his family currently reside in Decatur. 

Prior to the publication of this column, Decaturish forwarded it to City Schools of Decatur’s superintendent and School Board for comment. They did not respond. 

Several afters after the column was published, a spokesperson for the district said it would provide a response at a later date.

This column has been updated. 

City Schools of Decatur is proposing a 2-point millage increase on your property taxes next year. Furthermore, they are anticipating that the digest will grow 7.3% in aggregate, which means your tax bill from the schools will be about 15% higher than last year.

That is a very large increase, and furthermore it appears that CSD is projecting that the tax increase will be required for at least three years to get the finances back in order. How did we end up in this position?

From 2017 to the 2020 budgets, overhead and administrative costs at CSD grew around 7.0% per year. Overhead costs should scale, meaning you should not have to increase these costs with enrollment the same way you would instructional costs. After all, you only need one principal per school, or one superintendent per district. 7.0% growth is awfully high, and it is concerning these costs don’t appear to have been well managed.

But particularly interesting is the cost growth in central office, which grew nearly 30% per year over that time. It has more than doubled since 2017, going from $1.0 million to $2.3 million in 2020.

At the same time, instructional cost per student only grew at 5.3% per year. Foreign language instruction was cut.

This is jarring. We are being asked to support a significant tax increase for a school system that has substantially increased administrative costs, and especially increased costs related to the superintendent’s office itself, while not investing in teachers or instruction at the same rate and actually cutting key language programs?

And all the while the superintendent faces allegations that he took multiple days off without recording them as vacation and then still cashed out vacation days, earning $100,000 in additional compensation?

It is frustrating, to say the least.

Before we dive in deeper, here are a few critical points: this is a look at City Schools of Decatur finances, not the city of Decatur’s. People tend to badger their city commissioners on any issue related to their taxes, but it is important to understand that none of what we are discussing here is within the authority or purview of the commissioners or the mayor.

Which brings up a second related point: for the average homeowner, by far the largest portion of the tax bill is for the schools. On my most recent bill, roughly 63% of my payment went to the schools, and unless you qualify for senior exemptions your bill will break down very similarly to mine.

So, given that this tax increase on an already-large tax bill is an issue of schools, and for years the operational costs of the schools have grown apparently unchecked, you will want to contact your school board representative or the superintendent about your concerns, not your city commissioner.

Let’s get into the details. You currently pay 20.25 mills to CSD, so your tax bill for the schools on the average $600,000 home would be $6,075.

Let’s say your home grows in value by 5%, a reasonable estimate based on both prior years and next year’s expected growth. If the millage is increased to 22.25 as the City Schools of Decatur proposes, your new tax bill will be $7,009 – nearly 15% higher.

Don’t the schools have a reserve fund, one they can tap in emergency years like a pandemic, to avoid sudden huge tax increases on the populace?

Turns out, the CSD has been aggressively dipping into their general fund reserve for years, and so in the one year when a pandemic struck and they needed the reserve for emergency purposes, it was insufficient to meet their needs.

It is poor financial practice to take 9% of the entire budget from reserve, as CSD did in 2018, or 11% of the budget from reserve, as they did in 2019. These were large, deep draws during what ought to have been routine years.

Furthermore, CSD just raised the millage rate in 2020, from 18.66 mills to 20.25, and then still drew approximately $9 million from reserve in the 2021 budget. This is an alarming trend, and it shakes my confidence that CSD will be able to manage their finances sufficiently well to be able to reduce the tax burden in a few years’ time.  What is going on?

CSD will certainly say the recurrent deep reserve draws were driven by the unanticipated senior homestead exemption costs. Let’s fact check that.

In 2019, the year that CSD spent $8 million from their reserve, the homestead exemption cost just under $2 million in unexpected cost. That means, at best, CSD budgeted $6 million out of a reserve on routine costs that should have been anticipated. So, while the homestead exemption was an issue, is certainly wasn’t the only or even the primary issue.  This holds true for every year the schools heavily tapped the reserve.

In full disclosure I was a part of the committee recently tasked with correcting the senior exemption, without unduly burdening the most vulnerable seniors and preserving as much of the exemption as possible within the original expected limits. The corrected exemption will be put in front of voters this autumn. Alas, for our purposes, even if the legislation is approved the funding will not arrive in time to help this budget.

CSD would also say that enrollment has grown, and the schools have consistently provided teachers with cost-of-living adjustments (COLA) and step increases. While this is technically true, the rate of enrollment growth has slowed in recent years, and the teachers have received between 1% and 2% salary adjustments each year – not exactly huge, barely in pace with basic inflation, and in any case both scenarios are quite stable and highly predictable and should not have caught any budget by surprise.

Lastly, CSD would also claim that there were a lot of unanticipated expenses from the pandemic. While this is indisputably true for this year, it certainly doesn’t explain the reserve spend from prior years, nor does it justify runaway overhead costs.

The pandemic has put holes in government finance across the board. Specific to the schools, the state provides a large percentage of CSD funding, and the state has signaled that this number will decrease for next year. School districts are working to fill that hole.

There has been chatter that this decrease is exaggerated, and there is some evidence that the state finances held up better through the pandemic than expected. Neither of that helps a school system that has to build a balanced budget right now.  It is an appropriate precaution to assume state support will decrease until the state clearly signals otherwise, and for that reason CSD is forced to assemble a budget that solves for that decrease.

But other districts seem able to rely on their reserve in a way Decatur cannot, because we have weakened our reserve at exactly the point we needed it the most.

Managing a complex school system is hard. Putting together a multi-million dollar public budget is hard. This is why the superintendent’s salary and benefits are generous.

But you have to do the work. And doing the work means first and foremost showing up, controlling your own costs, and ensuring that additional dollars primarily go to the benefit of the students themselves and not to central office.

School Board, for the sake of our kids, you need to knuckle down here. I don’t see a quick fix that will avoid a big tax increase, but how about building in some incentive for Dr. Dude to control his overhead going forward? Like, for example, no bonus or salary increase for him until such a time as these purportedly scalable costs are better managed and the increases go to the kids and teachers rather than central office?

We cut languages, for heaven’s sake. How was that less important the amount of vacation days Dr. Dude gets to cash out? Absolutely infuriating.

Voters, please pay attention this year to the School Board member elections.  We can only get the school leadership that we demand.

Correction: In the original version of the column, the author calculated that tax-funded support for nutrition had been cut, and the implication was that this was a CSD policy decision. That is incorrect. Nutrition was cut from the general fund because federal funding for nutrition had increased. On a per-student basis, the total nutrition funding has kept pace with inflation, which is appropriate. The author regrets the error.

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