The Fulton County Board of Education learned a preliminary revenue forecast projects the school district will have an estimated $1.37 billion in revenue for the fiscal year 2026, but expenditures will outpace gains.
Chief Financial Officer Marvin Dereef told the school board during its March 11 work session that the county’s total taxable property value is expected to grow by 3 percent. That would increase tax revenues to $897 million.
Dereef said when the projected budget and expenditure forecast is presented at an upcoming board meeting. it will show expenditures are outpacing revenue.
The school district will be required to contribute a larger portion of local funds in the Local Fair Share program, Dereef said.
The Georgia Budget & Policy Institute (GBPI) posted on its website that Georgia’s public schools are funded through the Quality Basic Education Act (QBE) passed in 1985. QBE takes the total number of students to decide how much the state will pay out for school employee salaries and other expenses needed to run a school. Before sending that amount down to districts, QBE subtracts out what the state thinks each district should be paying on its own, called Local Fair Share.
The amount the state will designate as the school district’s Local Fair Share is projected to increase to $258 million, which will have a negative impact of $21 million, Dereef said. He said that would wipe out the tax revenue increase.
The decline in student enrollment also will affect state funding. Overall, the district is projecting a decrease in state funding, Dereef said.
He said expenditures will rise in part due to the increase in the employer contribution rate for health insurance and teacher retirement benefits. The Teachers Retirement System employer contribution rate rose to create a $6.8 million increase. The monthly health insurance contribution rate increased by $9.2 million.
The school district’s General Fund comes from two main sources, Dereef said: 65 percent from local taxes and 32 percent from state funding. Any changes in tax revenues or state contributions impact school funding.
Exemptions on property taxes affect the school district’s revenue. In 2020, exemptions were $5.8 billion, and now they top $13.7 billion.
The millage rate will be determined once the district receives tax digest data in May. The current millage rate is 17.08, Dereef said.
Dereef said the school district will continue refining its forecast as the Georgia Department of Education and the Fulton County Tax Office supply updated data.
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