By Jeff Rader
For three years, local government revenues in DeKalb have declined precipitously, as have public revenues throughout the nation. And yet, most DeKalb residents have seen little decline in the public services they enjoy and have only a vague understanding of the current financial condition of the county.
Now, with county reserves depleted, two recent bond rating downgrades and with the CEO and Board of Commissioners at an impasse over taxes and budget cuts, taxpayers should pay careful attention to decisions made over the next few months.
The commission and the CEO have seldom seen eye-to-eye in recent memory. This is a predictable consequence of DeKalb’s structural separation of powers, and is not unique to the current administration. But such disagreements were magnified and consequences became more serious when our steadily expanding tax base began a slide that might persist for several more years.
This situation demands a careful and dispassionate examination of priorities for our strategy of delivering services, and the revenues necessary to maintain financial stability. Regrettably, DeKalb has fallen short of this goal.
In each of his budgets, CEO Burrell Ellis has followed the tradition of his predecessors, unilaterally prioritizing expenditures and shaping the organization as he has seen fit. In each of his budgets, the CEO has proposed a millage rate increase to offset shrinking receipts, but the commission has been reluctant to raise taxes.
Retirement incentive program ‘went badly’
In Ellis’s first budget, the commission approved a ¾ mill increase to “offset the cost of Dunwoody’s incorporation.” The increase was mitigated for homeowners by increasing the proportion of the HOST tax allocated to offset your county tax bill. Although I voted against this budget, it passed, and county operations were largely unchanged.
Last year, the CEO’s second budget proposed a 1.8 mill increase, combined with a retirement incentive program to shrink the county payroll. With my vote, the commission balked at the tax increase, cutting pay across the board by rescinding holiday compensation.
The retirement program went badly, with more employees in key positions accepting the incentive than the administration projected, resulting in a contentious process of reauthorizing unexpectedly vacant jobs. Budget concessions made by the commission late in the year to the courts, sherriff’s office, and other “constitutional officers” depleted county reserves, and newly vigilant bond rating agencies predictably downgraded the county’s credit. Yet the public experienced little change in services.
This year, the county faced the third year of revenue declines. Without a tax increase, DeKalb could expect over $100 million less in annual revenue than in 2008. The commission for the first time adopted a Budget Priorities Resolution at the beginning of the budget process.
Among other procedural requests, the resolution placed a priority on avoiding a repeat of last year’s pay cuts, on preserving public safety headcount, and asked the CEO to present the budget divided into expenses that could be funded without increasing the millage rate, and additional expenses that would require new tax revenues, so that the commission could prioritize.
The CEO chose to ignore this last imperative, proposing a budget with service cuts and a 2.32 mill increase in taxes, about 10 percent for the average taxpayer.
In response, and without my vote, the commission abandoned the principles embodied in the budget resolution and cut funding across the board. As a consequence, the administration is cutting services. In the past few weeks, cuts have been announced in library, traffic court, tax collection and other services. Some commissioners seem shocked in this predictable response, but the administration must follow the budget the commission passes.
Bonds downgranded again
Recently, Standard and Poor’s announced another downgrading of DeKalb’s bonds and withdrew its rating for general obligation, appropriation-backed, and water and sewer debt, citing “…the absence of structural solutions and timely budget adjustments to fully offset the structural budget imbalance.”
The last rating is crucial, as DeKalb is finalizing a binding agreement with federal officials to improve our sewer collection system, and we must raise capital to make the improvements. Unless more revenues are found, we may be faced with furloughs, closed facilities, declining infrastructure, and legal sanctions. This year, it seems we are finding the bottom, but in an unplanned, reckless way.
Over the past two years, the administration has not recognized the historic times we are living in, and has failed to lead DeKalb to the smaller, more efficient government required. But across the board cuts will slash fat, muscle, and bone with the same stroke, and the commission’s refusal to raise revenues is contributing to the turmoil.
The DeKalb County government must unify around a systematic review of operations to determine what services are essential, how best to offer them, and to pay for them. This year, the consequences are real, and will determine the course of the county for years into the future.
Jeff Rader represents District 2 on the DeKalb County Commission.