Jeff Rader, Dist. 2 commissioner, Guest Column
The DeKalb County Board of Commissioners (BOC) approved a tentative 2010 budget of $565 million—a $17 million reduction from the budget proposed by the county CEO.
The approved budget does not increase the tax millage, which is used to calculate property tax. The budget is largely balanced by spending cuts. While county services and employees are going to be affected by the cuts, they are a necessary concession to the current economic climate. The challenge is compounded by the 27th payday, a recurring accounting anomaly that the county should have saved for, but didn’t.
These factors notwithstanding, the commissioners did not want to increase the millage.
The BOC partially rescinded budget cuts for the courts and criminal justice system proposed by the CEO. These operations generally are run by officials who are elected independently by the voters, thus are more independent of county control. They claimed that the CEO’s proposal to cut specialized positions would make it impossible for them to fulfill constitutional obligations, or could cost the county more in the long run. Their budgets were nevertheless reduced to 2009 levels, which will necessitate furloughs and other cost cutting.
Even with these amendments, the budget issue is far from over.
The BOC officially sets the millage in June, just before property tax notices are mailed out to taxpayers. At that time, the BOC will have a half-year’s data to update its revenue and expense projections. If there is a deficit, the BOC will have to come up with additional spending cuts or more revenue.
Already there is reason to believe there will be a deficit in the county’s mid-year projections. The CEO’s proposed budget was based on an estimated tax digest obtained from the tax assessor last fall.
After the CEO’s budget was submitted, the BOC asked the tax assessor’s office for an update on the tax digest. Based on more current information than was available when the CEO developed his estimate, the tax assessors’ office estimated the county tax digest will decline by 7 percent this year, which translates into a loss of about $20 million in county property taxes.
Another significant variable is the county’s early retirement offer to its employees. County employees have until May 1 to accept the offer. Until then, it is impossible to calculate how much the county could save this year.
To get the additional $17 million in savings, the BOC’s biggest move was the elimination of seven paid holidays for county employees, starting with Memorial Day (May 31). This is a regrettable necessity given the current budget projections. The BOC also eliminated the CEO’s proposed merit pay increase for county employees, take-home cars for some county employees, and at least 150 positions from the county workforce in addition to those vacated by the early-retirement offer.
The exercise of approving a budget now is to give county departments a tentative ceiling for their expenditures in this fiscal year, which began Jan. 1. If the economy makes a significant gain by June, then spending cuts could be restored. However, the general consensus is the economy will remain flat or possibly decline.
As far back as January 2009, economists projected that state and local governments would be hit hard by revenue declines in 2010. Unfortunately, Georgia and DeKalb County were slow to react.
The CEO could have introduced the early-retirement offer to county employees last summer with a December deadline. Financial savings could have kicked in with the start of the new fiscal year and enabled the BOC to better evaluate the budget.
Also, county departments could have been studied last spring to determine whether staffing levels are properly proportional to the services provided. Personnel costs – salaries and benefits – account for about 80 percent of the county’s budget. Preliminary results from such a study are expected this month, but any savings will not be fully realized this fiscal year.
There will never be enough money to achieve all the things the county needs or desires. The first principle in crafting a budget is to fulfill federal and state constitutional obligations and those mandated by county law. The second principle is to fund services that impact the largest group of citizens. The third is to help build a safety net for those who cannot help themselves, because we are a humane society.
In the next few months, the county will closely watch the economic indicators, property assessment process, expenditures and the independent staffing study. Working to control expenses, we will hope for the best and prepare for the worst.