State monies to help struggling districts going to Gwinnett, Clayton and Paulding. Many small-town systems get nothing. Why?

As many of you often point out on the blog, state equalization grants are not going to the presumed targets, poor rural districts, but to the mighty Gwinnett County Schools

And you always wonder why.

The AJC looked at the grants that are supposed to help struggling districts with weak tax bases in a Sunday story by AJC reporter James Salzer. The story explains how the grants are awarded, detailing a formula that benefits districts with booming enrollments and eroding property values. In other words: Gwinnett.

But an expert suggests that the calculus of the equalization grants needs to look beyond the property wealth-to-student ratio to personal wealth in a county, which would send more money to struggling south Georgia districts that may have stagnant enrollments but also have persistent poverty and historic school under funding.

Here is an excerpt of the news story: (See list of where grants are going.)

By James Salzer

Gov. Nathan Deal won praise in January when he announced plans to plow an additional $40 million into struggling Georgia school districts that are having trouble raising enough money to educate their children.

What neither the governor nor applauding lawmakers knew at the time was that virtually the entire increase next year will flow to Gwinnett, Clayton and Paulding County schools. Many of the small-town systems that most Georgians would call poor are getting nothing.

That’s according to calculations the Georgia Department of Education recently made using a new equalization funding formula legislators approved last year. About two-thirds of districts get the money on top of their regular state allocation to help address the financial disparity between wealthy and poor systems.

Gwinnett County’s equalization take alone next year will rise from $43.2 million to $65.6 million. Meanwhile, dozens of small, rural systems in Georgia — and many of metro Atlanta’s biggest systems — will get no extra funding. It makes some superintendents wonder whether the formula was drawn to help certain districts and not others.

“I am not sure there is anything equal about it, ” said Cherokee County Superintendent Frank Petruzielo. “It seems to me that it is the most politically motivated component of education funding in Georgia.”

House Education Chairman Brooks Coleman, R-Duluth, who co-chaired an education funding commission that recommended the changes to the equalization law, said politics has nothing to do with it. Gwinnett, he said, is benefiting from the formula used to determine payouts because it has a giant, growing student enrollment at the same time property values have tanked.  “There was nothing done to specifically help Gwinnett, ” Coleman said. “It’s a function of the numbers.”

Using more up-to-date enrollment and financial data, the House slightly altered Deal’s original request, approving $474.4 million in equalization funding for the upcoming school year, up from $436.1 million this year. Excluding Gwinnett, Clayton and Paulding, the amount of equalization funding would actually drop, slightly, next year. About half of all equalization funds go to suburban or exurban metro Atlanta-area districts.

The equalization fund, set up in 1985, is supposed to provide greater equity in school funding for systems with lower property tax bases. It was often thought of as a way to help poor, rural districts that can raise little from property taxes. But the collapse of the real estate market in metro Atlanta changed the equation, and the largest grants in recent years have gone to districts that are neither rural nor comparatively poor.

The state’s formula for disbursing the money uses the number of students in the district, the value of property and the property tax rate. A property wealth-to-student ratio qualifies some suburban and urban districts to receive grants.

In the final hours of their 2012 session, state legislators passed a bill intended to slow the growth of the equalization fund and get more money to poor rural districts. The changes reduced the number of systems getting equalization — weeding out some of those deemed too “wealthy.” In some cases, rural districts got more. In others, they were left out completely.

Gwinnett has been getting an increased share of equalization money in recent years because it has the right combination of rapid enrollment growth and eroded tax base. Rick Cost, the school system’s chief financial officer, noted that in 2007, Gwinnett schools enrolled 9.1 percent of all students in Georgia. Its tax digest was 8.9 percent of the state’s total. Next year, he said, Gwinnett will enroll 9.9 percent of all students in the state, but its tax digest will amount to 8 percent of the state’s total.

In 2007, Gwinnett didn’t qualify for equalization funding. Since then, it has been ranked poorer and poorer by the state formula, and has collected an extra $186 million. That money goes to help offset the system’s loss in property tax money.  “Since fiscal 2008 … we have lost $143 million in annual local tax revenue … and we have 26,000 more students, ” he said.

The tax base in many systems has plummeted since the recession, but enrollment in those districts is not growing like Gwinnett’s. Enrollment in DeKalb, Cobb and the city of Atlanta systems, for instance, has remained about the same or fallen since the October 2007 count. Enrollment in much of rural Georgia has been stable or fallen as well.

Gwinnett is often considered an innovator in education. Even in tight times, it is making a digital push to invest $54 million in technology improvements that, within a few years, will make hardback textbooks obsolete, allow students 24 /7 access to their schoolwork and give teachers the ability to give tests and track student success — all via the Internet.

By contrast, some of the small, rural systems missing out on equalization have one teacher per subject in their high schools, few advanced courses or foreign language options, no financial reserves to fall back on and no hope of raising serious money from property taxes.

Quitman County’s district, with 345 students, has a much smaller enrollment than most Gwinnett elementary schools. Its superintendent, Allen Fort, worries about having to lay off one or two of his few teachers because of limited funds.

“But somehow we’re richer than Gwinnett County, ” said Fort, whose Southwest Georgia district doesn’t qualify for equalization funding. “Don’t call it equalization, because it’s not equal.” Fort said Quitman schools raise about $70,000 from a mill of property taxes. The system’s budget is $3 million. “One mill (of property taxes) in Gwinnett County could run my system for 10 years, ” he said. “I am not against Gwinnett getting money, I am just trying to figure out how we got none.”

David L. Sjoquist, a state tax and funding expert at Georgia State University’s Andrew Young School of Policy Studies, noted that officials have made efforts in the past to lessen the amount of equalization money going to districts like Gwinnett. Sjoquist said there have been proposals in the past to incorporate some measure of personal wealth into the equation, which would help places like Quitman County, where household income is about half of Gwinnett’s, and the poverty rate is twice Gwinnett’s. But so far the idea hasn’t gone anywhere.

Coleman, the Gwinnett lawmaker, said counties like Gwinnett and Clayton get the equalization money because they have “earned it” under a formula designed to help systems that need it the most. “Gwinnett is big, and it’s poor, ” he said. But Gwinnett also has a strong legislative delegation, and the school system has its own lobbyist at the Capitol.

Fort has a hard time believing Gwinnett’s political clout hasn’t played a role in developing and maintaining a system that benefits the local school system. “Clout, hell, they’ve got a sledgehammer, ” he said. “There are more senators and representatives in Gwinnett County than there are in South Georgia. In the end, we don’t matter.”

–From Maureen Downey, for the AJC Get Schooled blog

80 comments Add your comment

Clutch Cargo

March 18th, 2013
10:21 am

Not getting their hands on a few crumbs tossed out by the state is not going to kill these south Georgia school districts.They have gotten by on little for years and years.It’s really nothing new.If anything,it has taught them to live within their means and run a tight(er) ship. Meanwhile, you can say with almost mathematical certainty that these extra funds handed to the “counties with clout” will be skimmed, stolen and misdirected by the educrats at the top of their counties food chains. It’s just the way it is.

Centrist

March 18th, 2013
10:29 am

Pretty much what Clutch just posted – but maybe having publicly pointed out this diversion will lead to some reform in the tilted calculus.

NorthFulton

March 18th, 2013
10:30 am

Gwinnett has lost its clout when it decided to file suit against the Charter Schools Commission and when Sonny Perdue left Gov Mansion. The new Gov and ruling Republican class at General Assembly can’t stand the Super and, if left to them, would not give Gwinnett a dime more than deserved.

Funny

March 18th, 2013
10:33 am

I would like to see resarch on how much the illegal immigrent population has done to make counties like Gwinnett so poor. Americans need to open their eyes to the true cost of educating these kids.

jarvis

March 18th, 2013
10:35 am

Values are going down, but Gwinnett is increasing in size. Are they getting more property tax payers, or are the majority of the new students living in rented property?

10:10 am

March 18th, 2013
10:36 am

Then again, school districts with rapidly expanding, increasingly diverse student populations face extraordinary capital expenses—new buildings plus the infrastructure to support them. Stable rural districts typically do not.

Nor does per student expenditure track exactly with outcomes. One only needs compare Chicago and Washington D.C … with the average Iowa or North Dakota school district.

sam123

March 18th, 2013
10:37 am

Gwinnett uses their money prudently plus they have a gift in knowing how to produce good test results.

Just A Teacher

March 18th, 2013
10:40 am

You would think that an equalization fund would vbe used to make things equal. Only in the Georgia legislature is the logic so askew that equalization grants are used to make things less equal. Ladies and gentlemen, I submit this as proof of how messed up our state government is.

d

March 18th, 2013
10:51 am

I always have to laugh at the “renters don’t pay property tax” argument. Sure, they may not pay them directly, but I don’t know of any landlord who is so benevolent that he or she won’t include those taxes in the lease payment. Even if there is someone, the tax is still being paid for the property by someone.

catlady

March 18th, 2013
10:51 am

jarvis, even renters pay property tax. Everyone alive who is not living under a bridge or in a monastery is paying property tax.

For years my small, poor (75% free lunch) rural system has “contributed” money to Gwinnett because our property was so over-valued by the banks, in collusion with real estate people.

Until a system taxes itself to the max, it should get NO money from others through “equalization.” I know a mil in my area isn’t worth much, but we should be willing to tax at 20 mils before anyone gives us additional money. Same for Gwinnett. What is their school millage rate?

irisheyes

March 18th, 2013
10:57 am

Gwinnett’s school millage rate is 19.25 (http://gwinnetttaxcommissioner.manatron.com/Tabs/Property/BillingInformation/MillageRateInformation.aspx)

I work in Gwinnett, and I’m embarrassed by this. We could easily get by on less money, but Alvin loves the fact that he can trot all over the country telling people how technologically advanced we are. Look, as a teacher, technology is nice, but a smaller class size and less people at the ISC giving me inane things to do would be better. GCPS could easily save $65 million by cutting back on the roll out of eClass (nice, but not necessary), getting rid of our benchmarks, cutting back on many of the test prep “services” they buy from companies, and consolidating positions at the ISC. (Cutting Alvin’s travel expenses wouldn’t hurt either.)

Just my opinion.

irisheyes

March 18th, 2013
10:59 am

BTW, I rent, and I’m pretty sure my property taxes are included in my rent. I can’t get my landlord to pay for anything until it’s ready to break down, so I doubt she’s paying property taxes for a house she doesn’t live in.

Concerned DeKalb Mom

March 18th, 2013
11:00 am

Raise the millage rate in Gwinnett–and other receiving school systems–to DeKalb’s rate, and then tell me they need money…and then we can talk about “equalization.”

Jovan Miles

March 18th, 2013
11:17 am

Its best for the entire state if we ensure that funds are directed where they are needed most rather than to the districts with the most political clout. Our state will NEVER be able to improve educational outcomes for all students until all students are valued equally and we apply equity when deciding how to distribute resources.

I don’t understand how anyone in this state could deliberately be against making sure the kids who need the most help, get it.

jarvis

March 18th, 2013
11:20 am

Thank you catlady for the basic explanation.

I realize portions of rent are to cover expense on the properties including the tax. I was referring to new tax basis…..like sub-divided land. If the population is increasing….in one way or another I would assume land is being purchased or divided (apartments). In either case, I’d assume the number of tax payers would be increasing.

catlady

March 18th, 2013
11:32 am

Sorry, Jarvis. I get tired of others saying that “illegals” don’t pay taxes. Ignoring that we all pay property tax and gas tax and sales tax, and many “illegals” pay income taxes as well. I know that is not what you are talking about.

I would think, as little building as is going on, that not too many extra $ of valuation is being added to tax digests. And when property is divided and sold, unless there is something being built, I would expect that the smaller parcels would still be worth about the same when added together. Surely, if any area is adding value, it would be Gwinnett.

DeKalb Inside Out

March 18th, 2013
11:34 am

Mountain Man

March 18th, 2013
11:51 am

“State monies to help struggling districts going to Gwinnett, Clayton and Paulding. Many small-town systems get nothing. Why?”

I presume you meant to say “poor-county” sysems instead of “small-town” (there aren’t that many town and city school systems and whether they are “small” was not the point). If you have a specific example of poor counties that get nothing, I would like to see where they stand on their millage rate. If they have a small millage rate (they don’t care enough about their kids’ education to tax themselves more) then why should the State be kicking in?

bu2

March 18th, 2013
12:01 pm

Gwinnett is one of the wealthiest counties in the state in per capita income per the article. They have a far lower % of low income students than any of the other counties receiving funds in the article. Now it doesn’t show property tax wealth around the state or sales tax. It would also be difficult to demonstrate the aggressiveness of the tax appraisers. It is clear that Gwinnet has been quicker than Fulton or Dekalb in reducing property values to reflect the recession.

A system that sends a bunch of money to one of the wealthiest counties in the state makes no sense, especially, when, as catlady says, they tax well below the maximum.

Just Sayin.....

March 18th, 2013
12:01 pm

So, the millage rate for Quitman is 13.75, and for Gwinnett its 19.25.

bu2

March 18th, 2013
12:07 pm

It also isn’t clear from the article if agriculture exemptions are taken into account.

But part of the formula clearly is that if you tax higher, you are more likely to send money in.

Karen Hill

March 18th, 2013
12:12 pm

Gwinnett is “poor?” I’m actually belly-laughing.

Patrick Edmondson

March 18th, 2013
12:14 pm

yeah, “just a function of the numbers”? Which were divinely ordained or set by the legislators? Gwinnett and Hall are the locus of Let’s Make-a–Deal and the GOP legislators catering to developers who BUY legislation to benefit their properties at the expense of other residents.

Ole Guy

March 18th, 2013
12:43 pm

Let us, for just a moment, skip past the politicos’ arguements and ask ourselves the basic question: Given the performances of these school districts, are they even worthy of anything remotely beyond the absolute minimum while “lesser” (politically-postured) districts get nothing? It would seem that…as in American business…abject failure is rewarded while the “others” are simply advised to…GO TO HELL.

Well done…

Gwinnett Parent

March 18th, 2013
12:45 pm

Renters actually pay more in property taxes. Owner occupied residences get a homestead exemption. However, once the property becomes a rental the exemption disappears. This raises the property taxes for the tenant occupied house and the landlord includes this in the rent. An apartment complex has a higher tax rate than a single family and is taxed on the structure’s value in addition to the land’s value. No homestead exemption there either. The problem comes when the tenants are receiving government funded rent vouchers on top of the free lunch,WIC, food stamps, as well as other entitlements. The truth is only a portion of the school’s funds come from property taxes.

Bernie

March 18th, 2013
12:45 pm

These TWO School Systems are mostly POOR and BLACK. The Republicans want to CHOKE OFF
the American Public School System as we KNOW IT, in Georgia. This is done to set the STAGE for A School Voucher Payment System which will be soon in coming to a school system near you. The State will write checks to the Parents to pay the Private Corporate School System to educate their children. A system that is untested & unproven.

m

March 18th, 2013
12:50 pm

Wow Bernie I LIKE how you CAPALIZE things….now, I am SMARTER, GEE THANKS!! dumarse.

high school teacher

March 18th, 2013
12:53 pm

Do banks pay property taxes on foreclosed houses? I’m just wondering. We could set the mils to 50, but if people don’t pay their property tax, then we still don’t have enough revenue to run the school system.

Question

March 18th, 2013
12:56 pm

Why can’t they figure out which counties need it the most help and then divide the money by the number of students?

high school teacher

March 18th, 2013
12:56 pm

Also consider the average property values of counties…

mountain man

March 18th, 2013
12:58 pm

Quitman just doesn’t want to tax itself as much as Gwinnett to fund its schools – but it wants the State to send it money.

mountain man

March 18th, 2013
12:59 pm

“Do banks pay property taxes on foreclosed houses?”

Yes, or else the county puts a tax lien on the property.

Bernie

March 18th, 2013
1:06 pm

m@12:50 pm – NAME CALLING is what Republicans typically DO, when a Indefensible Position becomes INDENFENSIBLE. I love you too! :)

Jack ®

March 18th, 2013
1:18 pm

There’s no big secret about the “why” of it: Small school districts don’t get headline treatment like the larger ones. And Gwinnett likely appears to have more problems than the smaller districts, so, a popular remedy is throw more money at the loudest problems.

Van Jones

March 18th, 2013
1:26 pm

Catlady, you are being disingenious with your “we all pay property tax” claim. Yes, renters (and more specifically, illegals) pay property tax included in their rent calculation but here, as Paul Harvey says, is the rest of the story.
One apt complex I know of in Sandy Springs (and there are numerous others) rents a 3br apt for $719/month. It’s near Chastain Park and the homes in that area are more like $500k-$1.5M. Assume, and this is a stretch, that each family has 3 kids. That’s about $6k-$15k in property taxes vs $700 and you really want to stick by the “we all pay property tax” statement?

Mountain Man

March 18th, 2013
1:41 pm

If I do the math right, Quitman STILL spends over $8600 per student, even with their low tax rate. What makes them so special that their citizens don’t need to pay as much property tax as I do?

alm

March 18th, 2013
2:04 pm

“Raise the millage rate in Gwinnett–and other receiving school systems–to DeKalb’s rate, and then tell me they need money…and then we can talk about “equalization.””

Amen Concerned DeKalb Mom

Clarence

March 18th, 2013
2:16 pm

They don’t have enough STUDENTS. Quitman has like 200 students. How much money do we need to send them to keep subsidizing the rural fantasy? Go down there. There is NOTHING. We should be encouraging them to move instead of pretending one day they’ll rebound in population.

Looking for the truth

March 18th, 2013
2:29 pm

To irisheyes: Amen!

10:10 am

March 18th, 2013
2:31 pm

@m: You misinterpret @Bernie.

He randomly capitalizes so as to enhance the goofy effect of his stated “opinions,” as well as to signal the comic relief he’s aiming to add to the day’s discussion. I was at first puzzled, too. But a look back on “positions” he’s previously taken on issues made all this readily apparent.

So chuckle along with the rest of us—or just scroll through to the next coherent commentator.

catlady

March 18th, 2013
2:54 pm

Folks, the money for “equalization” comes from other school systems!

catlady

March 18th, 2013
2:56 pm

Can you post what one mil is worth in each county? Newest data, perhaps from County Guide, please.

catlady

March 18th, 2013
2:59 pm

Are all schools allowed to go to 25 mils now, or just the original “special ones?”

Clarence

March 18th, 2013
3:10 pm

@catlady… you are only correct in that it comes from state taxpayers. The state never takes funds from school districts. Equalization is funded out of state general funds.

catlady

March 18th, 2013
3:17 pm

Clarence, I beg to differ with you. That is not how it has been explained to me. Every system sends in an amount of money from taxes. They either get that money back, or do not, and thus fund other systems. At one point my little poor system was losing several MILLIONS to the likes of Gwinnett.

catlady

March 18th, 2013
3:18 pm

Well, I assume we are both talking about the “Fair Share” program as being equalization money.

Mountain Man

March 18th, 2013
3:33 pm

“Can you post what one mil is worth in each county?”

Catlady, why would that matter? Yes Quitman only gets $70,000 per mill, but only has 345 students to educate.

If Quitman raised their millage rate to the same as Gwinnett, they would get over $1000 extra per student, making their spending per close to $10,000 per student.

Mountain Man

March 18th, 2013
3:35 pm

“Clarence, I beg to differ with you. That is not how it has been explained to me. Every system sends in an amount of money from taxes. They either get that money back, or do not, and thus fund other systems”

That is not the way I understood it, Catlady. ALL local property taxes stay at the local level. The State funding is out of sales taxes and income taxes and comes out of the general fund. They “equalize” from state general funds.

Clarence

March 18th, 2013
3:48 pm

@catlady – many many people intentionally distort their explanations of this. But I assure you, no funds are EVER taken from a local school district and “sent” to the state. As part of QBE (the primary funding formula, and NOT equalization), each system has five mills deducted from their earnings. This will vary significantly by district (richer systems have more subtracted), but funds are never TAKEN.

xxx

March 18th, 2013
3:55 pm

If renters think think they pay property taxes, perhaps counties should start filing liens against renters for unpaid tax liabilites. That tune would quickly change and they would realize the property OWNER pays the taxes. If every illegal skipped town, the OWNER would still be expected to pay the tax bill regardless of the amount he may have charged the renters. The country doesn’t come looking for the renter when the bill is late, Why? Because renters are not responsible for proporty taxes.