Two members of the Fayette County Board of Education last week blamed part of their ongoing budget woes on tax dollars being diverted to less affluent Georgia counties.
Chairwoman Terri Smith and board member Janet Smola said that a portion of Fayette’s local funding dollars are going to some of Georgia’s poorer counties and that diversion is a contributing cause to the board having to raise the local millage rate to the state-allowed maximum of 20 mills to make ends meet.
The reference was to the “5-Mill Share,” a state requirement that school systems spend the first five mills levied in their own county, that was a part of a broader discussion on whether the school board should impose further furlough days on school system employees.
As that discussion unfolded, board member Smola mentioned the “5-Mill Share,” noting that if the requirement was not in place that Fayette would not be “in this (financial) shape.”
Chairwoman Terri Smith agreed, saying that the “5-Mill Share” is “deducted from what the state sends us from the funding formula.”
“So essentially, that money goes to the poorer counties,” Smith said. “That caused us to push ourselves up to the maximum (millage rate).”
There was no challenge to those assertions at the public meeting last week.
But is there more to the story of the “5-Mill Share,” since the collection of the first 5 mills is a requirement statewide for every county, rich or poor?
It is a state law that says all school systems should help pay their way by using the first 5 mills levied for their own school system.
According to the Georgia School Council Institute (GSCI), the “5-Mill Share” in the QBE (Quality Basic Education) formula refers to the portion of the direct and indirect instructional costs that the state expects local systems to pay with locally raised funds.
Currently, the state requires local systems to contribute an amount equal to 5 mills of property tax generated within their taxing authority.
Funds that are raised locally through locally levied property taxes, including the “5-Mill Share,” actually never leave the school system and are not sent to the state or to other school systems. The “5-Mill Share” is simply the amount of the local funding “obligation” the state requires each system to pay, according to the GSCI website.
A check with Ga. Department of Education (DOE) Chief Financial Officer Scott Austensen confirmed the GSCI explanation of the “5-Mill Share.” Austensen said school districts do not send money to the state, adding that the 5 mills have to be spent in the county where the taxes were levied.
Though not mentioned by Smith or Smola at the meeting, there is a facet of public education funding that often does see state money going to Georgia’s poorer counties, at least in terms of relative property tax wealth. Those are called Equalization dollars.
But even those funds are not taken directly from richer counties, such as Fayette, and given to poorer ones. Nor are those dollars tied only to the relative worth of a county since they are also linked by formula to a local millage rate levied beyond the “5-Mill Share.”
Austensen said equalization is essentially a grant that comes from a different pot of money and is generated primarily by income taxes and from sales taxes and corporate taxes.
Fayette County is arguably Georgia’s richest county in terms of per capita income. Yet Fayette County, too, earlier this decade, received equalization dollars from the state.
