Playing with fire.

That's how some might observe

the financing plans Fayette County's "taxing authorities" have

set in place for the year ahead.

After years of seemingly endless

economic growth, the county's development has slowed to a pace more manageable,

some might say.

But the growth years spoiled

the budget writers, who got in the habit of assuming revenue projections

nearly always fell on the shy side of reality. Windfalls are a thing of

the past.

Last week, Tax Commissioner

George Wingo released the county's revised tax digest for the year, a

voluminous document that purports to show the value of every piece of

privately held real estate, every motor vehicle, every golf cart and whatever

else is deemed "taxable" by the law.

Net worth for Fayette County:

$11.3 billion in taxable assets.

Estimated retail sales this

year in Fayette County: $1.6 billion.

That doesn't necessarily translate

into instant revenue for Georgia's wealthiest county, however.

Nobody knows that better than

James Stephens, comptroller for the Fayette County Board of Education.

Last week, it was Stephens'

duty to inform the five members of the Board of Education that a $148

million operations budget approved in June wasn't going to balance out.

The problem? More cuts in funding

from the state, plus a lower than anticipated rate of growth in the county

tax digest.

The solution? Raise the millage

rate charged to county homeowners by 1.219 mills, or 12.29 percent.

A rollback in the portion of

the millage applied to bond indebtedness, however, will make the net increase

to homeowners 1 mill, or about $80 more to the owner of a $200,000 home.

The taxation rate charged by

the school district is pushing dangerously close to the legal limit. And

still, it may not be enough, Stephens concedes.

This month, the school district

will borrow money to make the payroll, not an unusual move, due to the

ebb and flow of tax revenue, but unnerving coming so early in the school

year.

And with the promise of a midyear

"austerity" adjustment in state funding in doubt, Fayette County's

teachers will likely go without a 1 percent pay raise expected in January.

A freeze on all non-instructional

related spending is on the table and ready to implement if need be, said

Stephens, a military veteran with a no-nonsense, by-the-book style of

ledger management. Things look tough, but it could be worse.

"People here want good

schools and good schools cost," said Stephens. "That's what

we're finding out."

GOOD SCHOOLS COST

Indeed, with the proposed millage

increase, Fayette County widens the gap as the metro Atlanta community

with the highest school taxes.

Not too long ago, the reverse

was true.

Fayette's total proposed combined

millage rate of 22.694 is topped only by DeKalb County's 22.980, according

to a survey of metro Atlanta school districts compiled recently by the

Cobb County School District.

But the impact on DeKalb homeowners

is lessened significantly because of a $10,000 homestead exemption in

the state's second most populous county.

Fayette's homestead exemption

is among the lowest in the region, at $2,000.

The amount of school taxes

paid by the owner of a $150,000 home in Fayette County, according to the

survey, is about $1,310.

In DeKalb, where the millage

is actually higher, it is just $1,149.

On the low end of the tax scale,

owners of a similar home in Forsyth County pay just $940.18 a year in

school taxes, where a $7,000 homestead exemption applies.

In Clayton County, where there

is no millage on bonds to fund facilities, homeowners are charged just

$948 a year.

Even in the city of Atlanta,

where it is assumed taxes are taken and services never rendered, owners

of a $150,000 home pay under $1,000 a year in school tax.

The difference, again, is a

homestead exemption, this time to the tune of $15,000.

In other words, the bargain

educational system Fayette Countians used to brag about is no more. And

Stephens is wringing his hands trying to figure out how to adjust to another

5 percent in state funding cuts already announced for the 2005 budget.

Twice in recent years, Fayette

voters have defeated SPLOST referendums that would have funded capital

improvements and relieved pressure on the millage rate.

While school system facilities

planners say more new schools will be needed starting in a couple of years,

serious discussion about how best to finance the next wave of construction

hasn't really begun, at least not in public.

The Board of Education, playing

it safe, will probably lean to another bond referendum in November 2004,

and that will mean still higher taxes.

PENNIES ADD UP

In Peachtree City, sales tax

revenue has played a different role.

Last week, a divided Peachtree

City Council set the city's 2004 budget, voting 3-2 to accept the $27.9

million plan and raise property taxes by an effective 17.4 percent.

The culprit, city leaders insist,

is a redistribution of the county's 1-cent LOST that left the city shorthanded.

Beyond that, the city is raising

taxes at double-digit rates while adding just one new employee citywide

and slashing spending across all departments.

The only true consolation:

Employees will receive a 2 percent cost of living adjustment in their

paychecks, come October.

Councilman Dan Tennant, a loud

critic of the city's intentions to raise taxes instead of cutting spending

or personnel, was against the plan. He was joined by Councilman Annie

McMenamin, who gave no indication prior to the meeting that she opposed

the budget or the millage rate increase.

Mayor Steve Brown and councilmen

Murray Weed and Steve Rapson gave their approval, as expected.

The actual millage rate will

increase from 4.703 to 5.283, or .580 mills, city officials say. Though

it represents only a 12.3 percent increase in the millage rate, state

law requires governments to announce the percent increase over the rollback

millage rate, if property values increase. The rollback millage rate was

calculated to be 4.50 after revaluations by the county tax assessor's

office this year.

Though it's the leanest budget

in city history, it's not lean enough for Tennant, running on a "no

higher taxes" mantra.

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