Canton borrows $1M to fill tax gap

As a sign of the times, the city of Canton is borrowing $1 million to avoid a cash flow problem.

City Manager Rob Logan said city officials are getting the 90-day loan, or tax anticipation note, while they wait for taxes to come in. “Fees and taxes are coming in very slowly,” Logan said. “It’s bad everywhere.”

Tax anticipation notes are a tool local governments have used for decades to bridge the gap until tax revenues can refill their coffers. They’ve been used before by Canton, said Logan.

This city in Cherokee County, like local governments across metro Atlanta, has been faced this year with a dramatic decline in revenues, particularly from development.

Money’s been so tight that Canton laid of six of its 166 employees and cut some programs last summer.

The city’s new fiscal year started Oct. 1 with a “very lean budget, probably the leanest we’ve ever done,” he said. “It anticipates the worst.”

The budget does not have any money for employee raises, Logan said.

He said the tightening money situation was even noticable when the city went to borrow the $1 million. The city approached seven banks, but only had responses from three, Logan said.