What is the rationale behind the Cobb school district’s lawsuit against the county?

The Cobb County School District filed a lawsuit against Cobb County and Tax Commissioner Carla Jackson, arguing the county has unlawfully withheld more than $130 million from school tax collections since 2011.

The lawsuit, filed June 15 in Cobb County Superior Court, asks a judge to declare that a 2001 local law requires the tax commissioner to send all school tax revenue to the Cobb County Board of Education without deducting a collection fee.

The district also asks the court to block the county from increasing the fee from 1.6% to 2.5%, a change the district says would raise the annual amount withheld from more than $13 million to more than $20 million beginning in fiscal year 2027.

The case is entitled Cobb County School District v. Cobb County, Georgia, and Carla Jackson, in her official capacity as Cobb County tax commissioner.

Follow this link to read the school district’s filing.

District says local law ended collection fee after 2011

The dispute centers on Local Act 240, a law passed by the Georgia General Assembly in 2001. The district says the law allowed Cobb County to retain 1.6% of school taxes as reimbursement for collection costs only from 2001 through 2011.

After that period ended, the district argues, the law required the tax commissioner to remit “all educational funds” to the Board of Education.

The district says the county did not seek a new law from the General Assembly when the fee authority expired. Instead, according to the filing, the county adopted a home rule ordinance in 2011 that attempted to extend the 1.6% fee through 2021.

The lawsuit argues that the county lacked authority to make that change because Georgia’s Constitution does not allow counties to use home rule powers to amend local laws affecting a public school system.

The district says the county continued collecting the 1.6% fee even after the home rule ordinance expired in 2021.

County said state law allows 2.5% fee

According to the filing, Cobb County Board of Commissioners Chairwoman Lisa Cupid sent a May 29 letter to Superintendent Chris Ragsdale and school board Chairman Randy Scamihorn stating that the county would begin withholding a 2.5% commission from school taxes collected in 2026, effective July 1.

The letter, included as an exhibit in the lawsuit, states that “there is no valid local legislation designating a commission rate for the collection of school taxes” and that, without such local legislation, the state law rate of 2.5% applies.

The school district disputes that position and argues Local Act 240 remains valid.

The district says the county gave no explanation in the May 29 letter for why it considers Local Act 240 invalid.

District says timing disrupted budget planning

The filing also criticizes the timing of the county’s announcement.

The district says the Board of Education adopted its fiscal year 2027 budget May 14 and the school year ended May 20. The county’s letter announcing the increase was sent May 29.

The district argues the increase would have a major effect on its operating budget, raising the annual amount withheld from more than $13 million to more than $20 million.

The filing states that the county collected $9.4 million in fiscal year 2022, $10.5 million in fiscal year 2023, $11.8 million in fiscal year 2024 and $12.7 million in fiscal year 2025 through the collection fee.

The district says the fee will exceed $13 million in fiscal year 2026.

What the district wants from the court

The lawsuit asks the court to issue a declaratory judgment stating that Local Act 240 is valid and requires the tax commissioner to send all educational funds to the Board of Education without deducting collection fees.

The district also seeks a writ of mandamus, which is a court order requiring a public official to perform a legal duty. In this case, the district wants the court to order Jackson to remit all school tax money to the Board of Education without withholding any fee for the county.

The district also filed an emergency motion for a temporary restraining order and interlocutory injunction to stop the fee increase while the case is pending.

The school district is also asking for attorney’s fees and litigation expenses.

The central question

The case appears to turn on whether Local Act 240 remains valid and controls how school tax collection fees work in Cobb County.

If the court agrees with the school district, Cobb County could be barred from withholding any school tax collection fee going forward. If the court agrees with the county’s position, the statewide 2.5% rate could apply.

The filing says the district is seeking prospective relief for now but is evaluating whether to seek recovery of money previously withheld.

The Cobb County School District posted the following news release on its website arguing that the assessments by the county impacted

The Cobb County School District announced it has filed a lawsuit to prevent the Cobb County Board of Commissioners from taking money away from Cobb’s students and teachers. 

Since 2011, the Cobb County Commission has charged the School District over $130,000,000 in administrative fees to reimburse the County for the cost of collecting school taxes. In fiscal year 2026 alone, the collection fee will exceed $13,000,000, equivalent to roughly 130 teachers’ salaries and benefits. Next year, the County intends to increase the fee to more than $20,000,000, which is roughly equivalent to 200 teachers’ salaries and benefits. We believe they do not have the legal authority to take more money from our schools. 

“Our responsibility is to protect the students, teachers, and taxpayers of Cobb County,” Board Chair Randy Scamihorn said. 

“This lawsuit is about the hundreds of teachers and thousands of students who would be affected. Every Cobb homeowner, business owner, parent, grandparent, and student benefits from a strong public education”, said Board Vice Chair David Chastain. “The Commission is trying to take millions of dollars from our classrooms for a tax increase, disguised as ‘administrative fees.’ Cobb’s parents want smaller class sizes, not more ‘fees.’”

Once again, the Cobb County Commission is refusing to exercise fiscal responsibility and is, again, attempting to seize more tax dollars, regardless of the consequences to Cobb’s students. 

With 94% of District funds spent on instruction and with one of the lowest per-pupil costs in the metro area, this attempted seizure would take money currently spent on teacher salaries, lowering class sizes, sports programs, and band and orchestra programs. 

It is unfortunate that the Commission is choosing to play politics with Cobb’s children and senior citizens, rather than exercising financial responsibility and living within the very generous funding provided to them by Cobb’s taxpayers. Nothing has changed. This is simply a money-grab, from classrooms, for absolutely no reason, other than the presumed hope of ending the senior school tax exemption or forcing a tax increase on Cobb homeowners. Both of which are strongly opposed by the District.

Our bottom line is simple: Cobb’s students are already funded less than their peers in most neighboring counties. We will protect the investment parents and grandparents have made to live and raise their families in Cobb.

[Editor’s note: The Cobb Courier used AI to help summarize the contents of the lawsuit]