Atlanta Public Schools will borrow $25 million to cover its expenses while waiting for property owners to begin paying their taxes.
The school board voted unanimously Monday to take out the short-term loan, known as a tax anticipation note, which must be repaid by Dec. 31. It will cost APS about $115,000 in interest and fees to borrow the money, according to Lisa Bracken, the district’s chief financial officer.
This will mark the fourth year in a row that APS has had to borrow money, a necessity officials said has been caused by delays in sending Fulton County tax bills. Local taxes make up most of the district's roughly $860 million general fund budget, and the district depends on that money to pay bills and employees.
Last week, district officials had braced for the possibility of borrowing up to $120 million. But, this week, they determined the district would need far less — $25 million — to get by.
A smaller loan will suffice because a judge on Friday gave Fulton County permission to send out tax bills, and the county announced Monday that bills are ready to go out.
That means City of Atlanta property taxes, including those paid to the school district, will be due Sept. 30. That timeline lessens the potential cash-flow crunch APS would have faced if tax bills were due later in the fall.
This year's loan amount is the district's smallest in recent years. In both fiscal years 2017 and 2019, the district took out $60 million tax anticipation notes. In the 2018 fiscal year, the district borrowed $100 million.
APS paid about $968,000 in interest and fees for the previous three loans combined.
Atlanta Public Schools headquarters in downtown Atlanta. BOB ANDRES / BANDRES@AJC.COM
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