Property taxes to back bonds for schools

LAWRENCEVILLE - Property taxes will back a Gwinnett County Public Schools' plan to generate $425 million in bonds, commissioners decided Tuesday.

But school officials say a property tax boost is not in the works, and sales tax funds should be able to cover the cost of 27 new schools.

"There will be no need for a property tax increase," said Rick Cost, chief financial officer of the school system, which is the largest in the state. "They did enable the board to levy a property tax, but that will never happen."

The Board of Commissioners agreed to back the bonds with property taxes, but that is only in the event that an extension of the Special Purpose Local Option Sales Tax does not produce the revenues needed. Both the sales tax and the bond issue were approved by voters in November.

Cost said he expects the 1 percent sales tax to raise $900 million in the next five years.

While another penny sales tax under way for the county government is only expected to bring in between $550 million and $630 million in four years, Cost said he's sure the school tax will easily bring in the money needed for the bonds. In fact, he said, the system will set up an escrow account, setting aside the first proceeds of the tax to pay off the debt before money can be spent on any additional projects.

"That's going to get us started so we can lock in on today's construction prices," Cost said. It will also help the system get to work on four elementary schools and two high schools, for which construction contracts have already been approved.

Lisa Johnsa, the county government's chief financial officer, said the vote Tuesday allows the school board to approve an additional millage to pay back the debt, but the Board of Commissioners would have to approve the rate each year, likely in June.

"We're just their conduit," Johnsa said of the commissioners' vote on a school issue. "In the event they don't get enough SPLOST, they would have to pay for it with property taxes."

Having approval to use property taxes to pay back the debt will help in an upcoming validation hearing on the bonds, which are expected to be sold in March, Cost and Johnsa said.