By John Schaffner

Mayor Shirley Franklin told a group of Atlanta community leaders on March 31 that she is not ruling out a property tax increase to make up for what may be a $120 million operating budget shortfall for 2008-2009.

“Everything is on the table on the expenditure and revenue side,” Franklin said during the 90-minute meeting at city hall — including raising property taxes.

That announcement came on the heels of a warning four days earlier from District 2 City Councilman Howard Shook to more than 100 members of the North Buckhead Civic Association (NBCA) that they should expect water/sewer rate increases in the coming year and beyond to pay for the second half of the court mandated improvements to the city’s water and sewer system. (See full story page 3).

“The only question is who is going to raise the rates and how high will they go,” Shook said.

However, at the NBCA’s annual meeting, Shook addressed the $120 million projected city budget shortfall and told the audience, “That means cuts. The good news is I see no indication that taxpayers will be asked to pay for this decrease in the form of a tax increase,” he said. “In fact, I am expecting a slight millage rollback. That means departments will bear 100 percent of the brunt.”

Shook has indicated his Buckhead constituents would not greet kindly an increase in the city’s property taxes.

“For people who feel the city employs too many people, those numbers are going to look really good in about 90 days from now,” Shook told the NBCA group meeting at the St. James United Methodist Church on Peachtree-Dunwoody Road. “Departments have been asked to cut 25 percent. We are going to try and hold public safety—police, fire, corrections, courts—relatively harmless,” he added.

Work on new budget to begin

Shook said city council will begin working on the new operating budget (2008-2009) in May. “The present budget is around $645 million,” he reported.

Franklin and her staff project the city will collect about $611 million when the current budget cycle ends on June 30. For the new budget cycle, from July 1 to June 30, 2009, city officials project Atlanta will bring in $492 million, creating a $119 million gap.

The city has few options to raise money, with the primary sources being property taxes, sales taxes and license and permitting fees.

Mayor Franklin noted that when she took office in 2002 there was an $82 million deficit. She raised property taxes by 51 percent to cover half of the debt. The rest was made up by cutting jobs, giving no raises and leaving some positions vacant.

Since 2002, Atlanta has rolled back its property tax rate by 22 percent to compensate for increases in property values. Last year, Atlanta collected about $128 million in property taxes, just slightly more than the $125 million it collected in 2003.

Shook has said, “Failure to roll back is a backdoor increase.”

In regard to the current budget problems, Shook told the NBCA audience March 27 that an independent audit of the 2007-2008 city budget had just been completed, following the recent reporting of at least a $65 million shortfall for the present year.

He said the audit “shows there are no smoking guns. There is no evidence of malfeasance or corruption. It is just old horrific mistakes, very much mirroring what the administration has been saying for the past couple of months.”