Budget and Finance
Dalton Public Schools has been struggling with revenue shortfalls from both state and local sources in recent years causing significant changes to operating budget expenditures.
Dalton Public Schools’ five major funds are the General Fund, Special Funds, School Nutrition Funds, Capital Funds, and Debt Service with the General Fund of $71 million being the primary source of revenues and expenditures. The Special Funds are $7 million and make up most of the district’s Federal and State grants. The School Nutrition Funds are just over $5 million. The Capital Fund dollar amounts can vary depending upon the availability of resources and the particular projects in progress. Most of the Capital Fund projects are financed with an Education Special Purpose Local Option Sales Tax (ESPLOST) that may be augmented with General Fund resources from time to time. Currently, the district has one small Debt Service obligation of $150,000 annually that will be paid in full in fiscal year 2018.
General Fund Revenues
The district receives about 55 percent of General Fund revenues from state sources, 43 percent from local property taxes, and 2 percent from other local and federal sources. Since 2003, Georgia school districts have been under austerity reductions under which the state General Assembly has been unable to fund the Quality Basic Education (QBE) formula that is primarily based on student enrollment. During the recession, state funding reductions reached an all-time high for three years from 2011 through 2014. In fiscal year 2015, Georgia school districts saw some relief with additional revenues due to the relaxing of austerity reductions. Although austerity reductions are still in place, both fiscal years 2016 and 2017 have additional state revenues due to further relief from revenue reductions.
Dalton Public Schools property tax base is 72 percent industrial and commercial property, 25 percent residential, and 3 percent motor vehicles. When the Dalton economy began to decline in 2010, the district experienced a loss in local revenue because of the declining tax digest. From 2009 to 2013, the City of Dalton tax digest declined by 8 percent resulting in the loss of $2.5 million in school funding. Losses in local property tax funding were compounded by the first year phased-in implementation of the Freeport exemption of 20 percent on commercial and industrial inventory which is an economic incentive intended for commercial and industrial growth. In 2011 the loss of local property tax revenue that was attributable to the Freeport exemption was $700,000. For 2016, the same 20 percent Freeport exemption is a loss of around $1 million in local property tax revenue.
In a move to be sensitive to the financial situations of local property owners throughout the recession, the Dalton Board of Education held the millage rate steady for 6 years at 7.845 mills and drastically cut expenses. All the while, the district’s student enrollment continued to grow putting pressure on class size, program offerings, resources, and services. In 2015, the board approved its first millage rate increase in 10 years to 8.20 mills to meet the educational needs of Dalton students. That millage rate of 8.20 mills continues for both the 2016 and 2017 fiscal year.
General Fund Expenditures
Salary and benefits are about 83 percent of the district’s expenditures. Therefore, as the economic decline deepened, the district was forced to respond with tough financial choices, including eliminating positions, implementing salary reductions, work calendar reductions for both students and staff, and scaling back programs. Concurrently, other required costs were increasing like employee and employer state health insurance. In 2008, actual general fund expenditures were $59.4 million. By 2011, general fund expenditures were down nearly $7 million to $52.7 million.
The board and district administration continue to be good stewards of financial resources. The reductions in revenues and expenditures, combined with growing enrollment, have resulted in a lower expenditure per student for the district. However, the quality of academic program remains strong and the district remains sensitive to cuts that directly affect classroom instruction.
Each year since 2011, the board has approved adding positions to address growing enrollment and program needs throughout the district and expenditures have increased accordingly. As financial resources became available, additional days have been added to students and staff calendars, and full calendar restoration is in place for 2017. Dalton Public Schools is committed to maintaining appropriate resources to ensure educational excellence while being responsive and respectful to the local economy and community.