ATLANTA – Fulton County voted at the June 18 commission meeting to advertise a 1.57 mill property tax increase in the general fund. But stung by taxpayers’ sticker shock over the proposed 17 percent increase on their tax bill, Fulton County Commission Chairman John Eaves said the commissioners would respond. He vowed to take a sharper pencil to the 2014-15 budget of $625.4 million.
Eaves said he planned to call a special called work session to re-examine the budget. He pointed out that advertising the millage increase did not hold the county to passing that increase. It does cap the millage rate at the 1.57 mill increase, but a lower rate may pass.
Fulton Finance Director Patrick O’Connor said the millage rate is necessary for the county to meet its obligations.
“Without [the millage increase] we would be in a credit crisis,” O’Connor said.
The board voted to advertise the new countywide millage rate of 12.051 mills in a 5-2 vote (Commissioners Liz Hausmann and Robb Pitts dissenting). This advertisement means the county may increase the general fund millage rate by no more than the 1.57 mills advertised. The board may reduce the rate increase if it chooses at the July 16 board meeting when the final millage rate is set.
However, that would require either serious cuts or finding untapped revenues. The commissioners are faced with a $48 million shortfall in this year’s budget and the proposed 1.57 mill increase would generate an estimated $51.8 million.
And that includes a $40 million infusion from the county’s fund balance. The county has regularly tapped into its reserves of $150 million since 2008 to balance the budget. This last dip will leave the county below the recommended minimum reserve of 8.33 percent of its annual budget at a little over 7 percent.
In other words, after this year, there will be no reserve to tap into.
The commissioners plan to hold a workshop to find some combination of budget cuts and overlooked revenue to reduce the tax increase.
“We want to explore every option, whether it is additional revenue generation or budget cuts or unidentified revenue projections,” said Eaves.
No date had been set for the workshop as of print deadline.
Eaves said the mill increase was needed to make up a $48 million shortfall in the budget.
“We have a lot of divergent views,” Eaves said June 18. “We have heard from a large contingent from the arts community and the social services community about their needs and the good they provide in the community. We have also heard from the taxpayers who are understandably concerned about such a tax increase.”
He also pointed out that Fulton County has not increased its millage rate since 1991. Meanwhile, almost all other metro Atlanta counties have raised millage rates since the 2008 recession. The recession forced millage increases in Cobb (16 percent), Gwinnett (21 percent) and DeKalb (26 percent).
“The reality is the economy has not really turned around in Fulton County. Most property values are still depressed,” Eaves said. “We have not seen property values recover yet.”
He pointed out that during the recession, Fulton County had the highest number of foreclosures in the state.
To assertions that Fulton County government is simply “too big,” Eaves counters by noting 25 percent of county residents live in poverty.
“We are a government that serves those needs. We are a service government,” he said. “But we owe it to our citizens to look at as many opportunities as we can [to reduce the budget] and be good stewards of taxpayer dollars.”
Hausmann said the budget crunch that Fulton County is experiencing has been on the radar screen for years, and said it is the board’s unwillingness to deal with that reality that has put the county in this position.
“We have seen this coming, yet we continue to spend, spend, spend. Now they want the taxpayers to pay more,” Hausmann said. “We have continued to balance our budget using our reserves. Now that will be completely gone.”
And Hausmann said North Fulton will be paying more than just a 17 percent increase in their property tax bill. Since property values in North Fulton are starting to regain equity, the increase in real terms will be more like 20 percent to 25 percent.
“The new valuations will hit taxpayers just as they are beginning to recover from the recession,” she said.
As to where to make cuts, Hausmann said there are many areas to make cuts that do not affect service delivery. She pointed to fleet management, human resources, payroll and other areas as good places to start.