CANTON —The Georgia Charter Education Foundation Local Governing Council for Cherokee Charter Academy has projected a shortfall for this year’s budget due to an unanticipated property tax payment.
“The tax payment was a property tax payment that our landlord had to make for the building in which we reside,” LGC Treasurer Danny Duke said Thursday. “And in our lease, which is customary with all leases, is we have to pay any out of pocket costs as it relates to taxes, et cetera, et cetera.”
At the LGC’s May 22 meeting, the council said the payment of $109,215 was unbudgeted.
“It was not budgeted because we were operating under the opinion, (that) because we were a nonprofit operating out of the building that we would be tax exempt and that we would not be subjected to property taxes as most non-taxable, tax exempt are not subject to those property tax,” Duke said. “Our (building) owner is a taxable organization, is a for-profit taxed organization, so as a result we had to pay.”
The Cherokee Charter Academy is funded by the nonprofit Georgia Charter Educational Foundation, and leases its school building from a for-profit real estate arm of Charter Schools USA called Red Apple Development.
“It was unexpected, unbudgeted, based on what’s customary across the United States and state taxation,” Duke said. “And we discovered there was a difference in the state statute that caused us to have to reimburse our landlord for property taxes, due to the fact that they are a taxable entity and we are not.”
Based on the CCA’s budget for FY 2013, available on their website, the school had projected a $144,885 surplus.
The property taxes have been paid and Duke said in the future the LGC will include the payment in their normal budget.