Your proposal is a bold one that requires careful planning, thought, and research.

Any state effort to provide relief from school property taxes should first consider the current state reliance on them. $1.3 billion in local property taxes collected this year were required by the state. Austerity cuts meant local taxes had to cover another $333 million to pay teachers and provide the classes as required by the state.

Rather than seeking a constitutional amendment now, the state can impose a smaller sales tax increase to provide the opportunity for immediate tax relief of $1.6 billion and further study the optimal mix of revenue for funding public schools.

Before a tax shift as proposed, the Governor’s Education Finance Task Force should complete its work and make its recommendations. Also, our federal representatives should work to amend the tax code to allow a deduction of state sales tax. With the opportunity for federal deductions for taxpayers and the research-based recommendations of the Task Force, legislators would be in a much stronger position to propose a funding change.

If the legislature chooses to continue on this path, there are several issues that need to be addressed:

• How will teacher salaries be determined to compensate for the loss of local supplements?
• How will we fund capital spending if a SPLOST is not won or is inadequate?
• How will we fund technology needs since neither lottery funds nor local funds will be available?
• Do we distribute the funds as a block grant to local boards or through a state formula?
• What is Plan B when sales tax revenue is insufficient due to changing conditions?

Finally, before dissolving the partnership between the state and local boards, it should be kept in mind that there are several reasons partnerships are created. One is to share the financial costs of the venture and another is to share the liability for the venture. If the state has the sole right to levy, collect, and disburse funds for K-12 schools, then it would seem that the state is solely liable for the adequacy, equity, conditions, and results of our public schools. What is the potential financial impact of this liability?

The issue before this committee is not a simple question of sales tax versus property tax. We must ultimately answer two questions:

• How do we provide an adequate, stable stream of revenue to fund our public schools in a way that is “fairest” to the greatest number of people?
• How do we equitably disburse the funds raised?

We encourage you to consider offering property tax relief through replacing the five mill requirement and austerity cut with a sales tax to be disbursed per FTE in a block grant. We further encourage a thorough study to determine an optimal mix to provide a stable, adequate revenue stream to give all Georgia’s students an opportunity for an excellent education.

Angela Palm
Executive Director
Georgia School Council Institute