DeKalb County CEO Burrell Ellis says continuing declines in revenue and increases in costs mean the county needs to raise taxes this year.
In his ‘State of the County’ address Jan. 6, Ellis said he has recommended an increase of 2.32 mills, which county officials estimate would increase the property tax bill for the owner of a typical DeKalb home, valued at about $200,000, by about $240 a year.
“These are tough times for all of us,” Ellis told about 400 people attending the breakfast speech at the Thalia N. Carlos Center on Clairmont Road. “The fiscal trials we are experiencing here in DeKalb are but a microcosm of what is happening in the state, across the nation and around the world. We still struggle to find our footing in the wake of a great recession.”
Ellis said county revenues have fallen by $86 million during the past two years as the value of DeKalb properties have declined and the city of Dunwoody was created, removing properties from the county tax rolls. He said county officials expect an additional decline of about $12.8 million this year and anticipated cost increases totaling $39 million.
“Realistically, there is no way to wrestle under control either a federal deficit in Washington or a local revenue reduction right here at home, without both cutting spending and raising revenue,” he said. “We must strike the necessary balance.”
The county already has cut its costs by offering early retirement to 830 employees, the CEO said, and then eliminated 400 of those positions.
At the same time, the county has allowed its reserve fund to fall to about $9 million, he said, when it should be about $45 million.
“We must rebuild our reserve fund” he said. “It is our savings account, our primary line of protection in the event of an unexpected emergency. Good accounting principles require that the reserve equal one month’s operating expenses, or $45 million. In order to balance previous budgets without raising taxes, we have depleted our reserves down to $9 million. For an organization of our size, that’s like living “paycheck to paycheck.”
District 6 DeKalb County Commission Kathie Gannon called it “premature” to predict whether the commission would go along with Ellis’ proposed tax hike. “It’s not as easy as saying ‘Yes, I’m for it,’ or, ‘no, I’m not,’” she said.
Commissioners will have to study the budget to see whether any additional cuts came be made before deciding to increase revenues, she said. “Before we end up raising taxes, we have to demonstrate we’re cutting as much as we can,” she said.
She predicted the commission likely would consider raising taxes, “but perhaps not to the extent that has been recommended.”
In his speech, the CEO found a silver lining to a different fee increase DeKalb residents face.
The county recently approved an 11 percent per year hike in water and sewer rates over three years to pay for needed improvements and repairs to the system. Ellis said $1.3 billion would be spend on fixing the system. “Some of these upgrades are mandated by the federal government,” he said, “but all are necessary as many of the key components of our water and sewer system are more than 50 years old.”
Ellis called the repair program “DeKalb County’s economic stimulus plan” and said it would translate into an overall economic impact within the region of $5 billion.
“These public works projects will create approximately 1,300 jobs locally,” he said. “And because of our Local Small Business Enterprise program and other procurement initiatives, many of these jobs will be directly targeted to DeKalb County citizens and small, minority-owned contractors.”
The county, he said, will provide training so DeKalb residents would qualify for the jobs.
Ellis called public safety the county’s top priority.
“The good news is crime is down,” he said. “In 2010, violent crime fell 9 percent and property crime went down 8 percent.”
The county has opened a new police precinct in south DeKalb and has bought land for a new precinct in north DeKalb. County police officers who had patrolled Dunwoody have been re-deployed to unincorporated DeKalb, he said, increasing the county’s per-capita police presence.