Sunday, November 6, 2011

Penny by Penny

David Montané, a leader in the local Libertarian party regularly leaves comments on this blog that give me pause. I find his perspective often reminds me of early founders of American principles. In a recent post, David left this comment, "Everyone has been writing, both on this blog and all the local papers, about what will be done with the money if SPLOST is renewed. Will it be wasted, or will it benefit the children? Should we vote NO this time, then if they do what we want vote YES next time? This is the way those who have a special interest in the public schools look at the matter. This is so because the schools and buses and computers constructed with SPLOST money, in the words of Frederic Bastiat, are "seen" - they are visible to all. "This blinds all eyes" to the real effect of the tax on the public welfare. As an austro-libertarian, my interest is not in how the money will be spent, but in how it will NOT be spent - the "unseen". If we continue the SPLOST, $100 Million per year, from mid-2012 to mid-2017, will NOT be spent by individuals deciding on their own how that money should best be spent or saved or invested. Instead, that money will be forcibly removed from them at the cash register. In this sense, no matter how the money is used, it is stolen money and will obviously be misused. (Read "That Which is Seen, and That Which is Not Seen")

He has a point. I am tired of being taxed in every nook and cranny of my life and would most likely spend my money more wisely if allowed to keep it. Although I don't mind paying taxes for basic societal needs, we are over-taxed in DeKalb and much of it is simply squandered. On top of that, the great state of Georgia has abused DeKalb for over a decade now. First, we all pay taxes to the state of Georgia and then the State, using a complicated funding formula called QBE (explained as well as possible by Joe Martin at the January, 2011 ELPC meeting) calculates what our school system is entitled to from state funds by adding up the numbers of our students, having multiplied each by a different weight proportionate to their individual needs called "FTE"*. Then, in something they call "Austerity Cuts", the state just hacks away at our entitlement total until it becomes a number the state feels comfortable sending to DeKalb. This has cost us hundreds of millions in lost funds over the last decade. It's frustrating and harmful. Have your ever noticed how hard CFO Marcus Turk has tried to alert us to this over the years? He mentions it every time he presents a budget. I've included a couple of his charts below.

FTE State Funding Summary
(click to view larger)

Worse, add to these "Austerity Cuts" the "Equalization" of school funds by the state, where they take what they call our "Local 5 mill share" and simply give it away to counties around the state that they decide are "poor" and "rural" and need our money more that we. Guess how much they take from us for "Equalization" every year? You are right! 100 Million Dollars! (Insert pinkie upside down at the corner of your mouth when you read that.) $100 Million (or more). Ironically, this is just about exactly the same amount we are now poised to tax ourselves and our guests (for the fourth time) to cover what we need to build and maintain our schools. How long until they start redistributing our SPLOST pennies? I wonder if our poor, rural neighbors appreciate that we are willing to double-tax ourselves so that they can build new schools too.

Actual funds received
vs entitlement
(click to view larger)
This is $100 million, penny by penny, taken from the good people of Dekalb - who already pay quite enough to fund a perfectly functional school system if those in charge would simply make it functional. We wouldn't need a SPLOST if those at the state would return the what they take from us year after year to give to "poor", "rural" counties who don't tax their property owners at nearly the same rate as we. We are fools to play into this game of income redistribution by the state. Vote "No" on SPLOST and instead, demand that your state legislators return our hard-earned money!

The Cobb County Budget available online includes this chart:

Property Taxes - Taxes levied on real and personal property, based on values assessed as of January 1 each year. FY2012 Property Tax revenue is based on a millage levy currently of 20.0 mills. The following are FY2011 Metro Atlanta comparisons of proposed millage rates, homestead exemptions and taxes on a $165,000 home:

*(For more in-depth but easy to understand information on FTE, click here to download a great Powerpoint called FTE for Dummies written by Paige Cooley of the Savannah-Chatham County Public School System.)


Cerebration said...

You'll be interested to note that our neighbor Gwinnett County is a recipient of this "Equalization" money --

from page 22 of
Gwinnett's budget -

Educational Equalization Funding Grant

-Equalization grants are additional State funds earned by school districts whose property "wealth per student" (WPS) is below the 75th percentile of all districts in the State. The WPS of the district which is at the 75th percentile is the amount to which all lower ranking districts are equalized.

-For FY06 and FY07, the Gwinnett County School district did not qualify for this funding. However, with the continued growth in students outpacing the growth in the property tax digest relative to other school districts in Georgia, Gwinnett County Public Schools qualified for state funding under the equalization grant in FY08 - FY11 and will qualify again for FY12. The district’s projected funding
appropriation for FY12, under the existing state QBE funding formula, is $38.6 million. This is a $1.3 million appropriation increase from FY11 due to the continued growth in students outpacing the change in the property tax digest relative to other school districts in Georgia

-Gwinnett County currently ranks 70th out of 180 school districts state-wide in WPS.

Anonymous said...

So that does that mean Gwinnett County School district, last year named the best urban public school district in the country and rewarded with some not insignificant sum, gets $38.6 million in equalization funds in FY12?

Anonymous said...

The irony of 'equalization' is that it benefits counties--not all of them either poor or rural-- predominantly populated by people who vote against higher taxes.

Kim Gokce said...

The various forms of "Revenue enhancements" from our many governmental organizations have created a taxation system and burden that would make King George blush.

My personal instincts are very much in line with libertarian thinking. Managing public funds is a sacred trust. That trust is so violated so often many of us have hardened our hearts against our governments.

What would our Board, our PTAs, and our public discourse be obsessed with if not construction and building amenities? We might even have to spend more than a few minutes of our agenda actually discussing education.

Regarding SPLOST and the real needs we have - I think the renovation at Cross Keys and Dunwoody are examples of what moderate, uncontroversial capital investments should look like given our County's school plant and fiscal realities. Until we change our paradigm of school size, there is no point in building new schools in the old scale.

The gold-plating of small scale schools at Arabia, Tucker, and Chamblee are egregiousness abuses of tax dollars. These investments would have made sense if they were built at a larger scale and were designed to reduce the number of high schools we have to maintain. In all three projects, they are only adding capital expense to the taxpayers bills with little to no capital or operational cost reduction.

When a corporation makes a major capital investment in a new physical plant, they make sure to leverage that investment by consolidating older and less efficient capital facilities. Not so for our public schools ... our politicians make sure that they put our money where their votes are ... sigh.

Anonymous said...

It sickens me to see these politicians advocate for more taxation "for the children" when they are the ones who continue to rob our schools blind!

Viola Davis said...

Excellent article!

Your article helps us educate the public about the 5-mill tax that pulls over $100+ million dollars out of our school system.

We must unite and demand the state of Georgia stop the removal of $100+ million dollars because we cannot afford to finance other school systems in this bad economy.

fedupindcss said...

I guess I don't really have an issue with the general concept of "equalization" funding in education (although it does smack of socialism, a boogeyman to all red-blooded, government-check receiving Americans). But given that large swaths of Georgia are poor and rural with little or no tax base, I would want to see those children educated at least as well as those where I live.

However, when I see Gwinnett getting funds out of that pot, I want to claw my eyes out. Rural? Really? Forget DCSS: if the state wants to be taken seriously on education, they need to change this farce.

Bryce Evan Farbstein said...

The inequalities of "equalization" grants can be made a priority by the DeKalb delegation to GA Assembly. In the meantime, though, we have to decide whether to cut off our hand in order to spite the knife that has already cut off our fingers. Regardless, until there is enough to hold our elected school leaders and administrators fully accountable, there will be unseen waste and abuse.

Anonymous said...

I greatly appreciate CFO Marcus Turk alarming us on "austerity cuts". That's what he should be doing, and he deserves credit for it.

And the "equalization" shell game is completely unacceptable.

This demonstrates the complete failure an ineptitude of the (feckless) Tom Bowen-led Board of education.

They should be going nuts about "equalization", Gwinnett getting millions from it, and imploring the 20+ member DeKalb Delegation to make a stand. Even the Repub members of delegation like Millar and Jacobs would join their Dem counterparts on this fight.

Tom Bowen is an incompetent chair of an embarrassing board. it is shameful that the Lewis/Pope scandal, among many others, happened on his watch, and he doesn't have the backbone to resign.

Bowen, Womack and the rest of the BOE need to stop their meddling, as Womack/Foghorn Leghorn is doing with cell towers and Coralwood, and as Gene Walker does for just about everything, and start truly advocating for county residents by fighting "equalization" and "austerity cuts".

I'd love to see the all-powerful Fernbank PTA join the fight against "equalization" and "austerity cuts". if they put a fraction into those fights as they do against re-districting, protecting the aging Fernbank Science Center, and pushing for a new schol depsite they have a new $5 million dollard wing, then they would gain respect from other PTA's, instead of living up to their reputation of only looking out for themselves.

Mike Jacobs reads this blog. Mike, please help fight "equalization" and "austerity cuts"!!!

Anonymous said...

Someone put up an analysis on here not too long ago that connected the failures of the school system with the overall political picture. My take was that these failing system are run by people who are seen to be Democrats and that the Democratic Party is tainted with the perception of corruption and that this fits with the rising unwillingness to support government. I remember the statement along the lines that the Democratic Party has become a minority party of the minority. Does anyone really think that until this 3-ring circus is demolished anyone will take the DeKalb delegation seriously? Can you save DeKalb county from south DeKalb county? Can you save DeKalb from itself?

Anonymous said...

I don't know that I have a problem with "equalization" in theory to support the really rural, really poor parts of Georgia. I have a problem when Dekalb is a disaster and is supporting a place like Gwinnett, which is in great shape to my eyes. I also have a problem when Dekalb citizens are being taxed pretty much to the max and the "receiving" counties refusing to tax to their max (even against those that could pay the tax -- e.g. the factories and/or other large businesses). Then, I have a problem.

Anonymous said...

"I'd love to see the all-powerful Fernbank PTA join the fight against "equalization" and "austerity cuts". if they put a fraction into those fights as they do against re-districting, protecting the aging Fernbank Science Center, and pushing for a new schol depsite they have a new $5 million dollar wing"

Actually they have a $2,200,000+ addition in 2005. The consulting company DCSS hired recommended no repairs. It's totally unacceptable to tear down a 2 million dollar addition. Doesn't this tell us something about the past administration's (still there under Dr. Atkinson) planning abilities.

Anonymous said...

There are some poor school systems that really do need help, but I have serious problems with DeKalb supporting Gwinnett's school system. They don't need the money and could ask their residents to pay more in taxes, just as we have been asked to do. I really think that they should be asked to pay into the equalization fund instead of drawing money out. The thing to do is to start contacting our state representatives, Democrat and Republican, and let them know that this situation needs to be fixed. This needs to be a bipartisan initiative.

Anonymous said...

Reading the "equalization" terms, it looks like school systems that have higher property taxes and whose property tax assessments are high on average are considered wealthy and therefore their revenue needs to go to "equalization". So the greater the property assessments and millage rate, the more the money flows out of our county.

QBE earnings are intended to provide for an adequate education. Equalization is an attempt to address equity. The concept of equalization is related to the concept of the 5 Mill Share, discussed above. Because all counties are not created equal in terms of property tax wealth, they cannot raise the same amounts of money from local property taxes. The state provides additional funding to these counties according to a formula that compares the relative property tax wealth of all counties in the state. Systems at or below the 75% level can receive equalization funding in proportion to the amount of mills they levy beyond 5 mills. (The Equalization formula was changed in 2001 to reduce the participation level from 90% to 75% and to include all mills above the first 5. In the past only the mills between 5 and 8.25 were considered, thus creating a disincentive for local systems to raise their own millage rates.) In FY 2008, this amount was $458,323,775. All figures are taken from the state allotment sheets which are available at In FY 2008, the amount of state funds that local systems will receive:

QBE Direct and Indirect Instructional Costs $8,160,615,559
Less 5 Mill Share -1,543,476,458
QBE “Formula Earnings” $6,617,139,101
Less FY 2008 “Austerity” Cuts - 142,959,810
QBE Net “Formula Earnings” $6,474,179,291
Plus Categorical Grants + 171,578,524
Plus Equalization + 458,323,775
Total State Funds $7,104,081,590"

Direct and Indirect Instruction Cost:

"Direct Instructional Costs reflect the cost of putting a teacher in every classroom based upon the grade of the student (K, 1-3, 4-5, 6-8, or 9-12), any special program in which the student is enrolled (EIP, special education, gifted, remedial, alternative, middle school, ESOL, or vocational lab), and the teacher:pupil funding ratio"

"Indirect Instructional Costs include funding for central administration and school administration, facilities maintenance and operations (M&O), media centers, staff development and 20 additional days of instruction. These costs are calculated based on system size, school size or student population. "

Does everyone understand that the state only funds a superintendent, his/her secretary and a limited number of Central Office employees?

Here is another good source:

Anonymous said...

I would guess Gwinnett gets funded because they have lots of families with school age children and they almost all go to public school. Dekalb has a large number going to private schools as well as more single and retired people.

Still, its hard to imagine Dekalb having that much of a tax base. Other than the Perimeter Mall area, there's not much commercial property and there are vast swaths of low income housing.

Anonymous said...

Just curious, how much of our tax increase we really get to keep from this year? What happens if the board raises our taxes and/or wipes out the Homestead exemption?

Would we be better off with lower taxes?

Cerebration said...

Joe Martin mentioned at the ELPC meeting linked in the post that the state also funds a principal for every school. Maybe DeKalb is punished for having so many small schools (many with under 300 students), resulting in so many principals??

Kim Gokce said...

I think I have a partial solution to the governance and fiduciary failures of recent administration thanks to Cere's SAT QOTD widget (in the right column). I just noticed it for the first time this evening ... brilliant! Of course, I had to try it and I am proud to say that I got today's correct in a blink.

Then I noticed that only 55% of respondents have gotten this question correct so far ... eureka! Any Central Office employee (including Athletics) who cannot answer this question (and quickly) should be RIFF'd immediately.

Here's the question and here's the link to QOTD (follow the link to test yourself for a DCSS admin job):

Home Game Attendance:
Game Attendance
1     456
2     508
3     399
4     550
5     n

The table above shows the attendance at the home games of the Central High School football team. If the median attendance for the five games was 456, and no two games had the same attendance, what is the greatest possible value for 'n?'

Kim Gokce said...

"Maybe DeKalb is punished for having so many small schools ..."

Certainly we are - and not just by State policies. Laws of common sense and financial reality are punishing DeKalb tax payers, parents, and children twenty-four hours a day, three hundred and fifty-two point two-five days per year, year in year out ... decades of punishment that we are queuing up to repeat for decades more by ignoring reality.

Anonymous said...

"Still, its hard to imagine Dekalb having that much of a tax base. Other than the Perimeter Mall area, there's not much commercial property and there are vast swaths of low income housing."

I don't think that's the point. DeKalb has kept the assessment high and higher in order to gain more tax dollars. In addition, they have raised and raised the millage rate (read some BOE meetings from the Crawford Lewis days to see how many time he asked the BOE to raise the millage rate - and they complied).

When you have your property assessments so high and a high millage rate, you will "look" wealthy when it comes to property tax and property tax rates.

Kim Gokce said...

... and don't forget that falling enrollment will make us look "wealthier," too! It a vicious cycle we've been on and look to ride for some time in a slow, downward spiral ...

Anonymous said...

So in their rush to increase the millage rate and assessments the county - mainly the BOE (since they are responsible for 75% of the property taxes) - has ensured DeKalb students lose $100,000,000 a year in general operations funds. I remember when DeKalb was losing $50,000,000 a year - not that long ago - due to equalization.

$100,000,000 represents the salary and benefits of over 1,500 teachers for our students ($65,000 per teacher is the average for salary and benefits for a DeKalb teacher).

The higher the assessment and the higher the millage, the more that gets taken from students.

Cerebration said...

Click on the charts in the post to view them larger. As you can see, even way back in 2003, our 5 mil share of equalization was $85 million - and it's continued to increase from there.

But yet, here come most of our board members as well as most of our legislators cheering on another layer of tax in the form of SPLOST which will serve to replace the money we lose year after year. It's frustrating to get the voters to see this vortex of tax.


Let's not give Marcus too much credit. We have heard about this issue for a long, long time from the Unhappy Taxpayer & Voter Group in DeKalb County.

All the time we were being taxed on home values that were overestimated and yet remained at that rate while the other counties reported realistic numbers and were deeemd to be "rural" or "poverty," we paid our taxes at higher and higher rates and even agreed to SPLOST dollars on top of that. This happened because the only ones voting or speaking out about what the schools needed were those small, outspoken parent groups that didn't really represent the needs of the children... just the needs or desires for THEIR children.

It is all a big HOAX. Trust me because I have been on the inside! This is a system that is terribly failing the children and wants to appear broke right before any type of request for more money and then have you leave them alone and go back to your regular life while you assume the money is doing the things they told you they needed it to do.

We pay more and more, and the kids get less and less. No child is left behind, but many are shown the way to the door, and there is no child permitted to jump ahead, either. Gifted students are identified based on how many grants can be uncovered to fund them.

It is absolutely necessary to get out an VOTE tomorrow. And please VOTE NO. We have to realize the error of our ways and reverse all the illogical pathways our money has been allowed to trickle down for years upon years.

Operations budgets do not increase at the steep levels that home values were increasing. So, a responsible board should have reduced, not increased, the millege accordingly. Many homeowners might have been able to get by instead of losing their homes if that would have happened. And, when home values take a sharp increase and therefore a tax windfall is experienced, a responsible board would INVEST the funds to SAVE for a rainy day. We should now be able to fund the capital needs of our schools from the INTEREST our funds should have been making all these years. That's called FINANCIAL PLANNING and is one of the primary jobs of the school board.

We throw money at things that really deserve love and attention. It is the problem that has led us into national debt and the housing crisis.

We want the problem to go away. And we think if we throw more money at it, we will have done our part and can then look around for others to blame.

The solution lies within all of us. Keep your pennies, save them and find a kid who could use a friend, a mentor or just a kind word. Want to feel better, help our schools by refusing the support the criminals who have run it into the ground.

No one deserves a six figure income and bonuses of nearly that much when Georgia is 49th in the country in education and DeKalb is the largest county at the bottom of the list. We are the ones dragging down the state and our state is draggging down our nation.

Why in hell would we want to do more of the same? Crawford Lewis said he will ask voters to approve SPLOST IV in November 2011. “Our needs are great and we need your support.”

No, your needs are great, Mr. Lewis. Our children are suffering. And we are putting an end to the irrational demands of the whining child (our school system) that needs love and attention, not to be showered with money that will at best put a band-aid on the problem, but not cure the disease.

Cerebration said...

Exactly. Remember, this board has voted over and over to pay for Crawford Lewis' defense in the criminal case and seven or more former board member's attorneys in the civil case as well as our counterclaim in the civil case. ALL paid from the general operating budget -- the budget for students, teachers and schools. All resulting from illegal activities and civil lawsuits stemming from SPLOST projects. So, in essence, SPLOST construction has actually cost us millions upon millions from our general classroom operating fund.

How ironic.

Cerebration said...

In fact, when you think about it, add up the $17 million already spent on King & Spalding for the civil case, along with an additional $19 million committed to K&S on the books for a "settlement", the over $200,000 for Crawford Lewis' criminal defense along with the costs to the system to comply with the DA, the untold millions taxpayers have paid to the district attorney's office to prosecute Lewis and crew - and you will find that SPLOST construction has actually taken anywhere from $50 to $75 million or more from our general operating funds.

And people still actually believe the board when they say they are "for the children"?!

No Duh said...

According to wsbtv website, SPLOST passed 63% to 37%. As if there were any question.