Cash-strapped Atlanta eyes DeKalb tax money

The city of Atlanta’s search for more money as it grapples with a budget crisis has some city leaders looking to its next-door neighbor for a cash infusion.

Two Atlanta council members want the city’s legal staff to look into getting a cut of DeKalb County’s Homestead Option Sales Tax. Councilwoman Natalyn Mosby Archibong believes the city could be in line for about $10 million a year.

“Atlanta has been out of the loop,” said Archibong, whose council district lies in DeKalb. “We are doing a disservice to our citizens to not be at the table and not getting a piece of the pie.”

HOST, a 1-percent sales tax on most goods sold in DeKalb, was created in 1997 to offset property taxes on homeowners and fund infrastructure projects, such as new sidewalks and paving some streets.

About 33,000 Atlantans live in portions of the city that are within the boundaries of DeKalb, according to the Atlanta Regional Commission. They live in neighborhoods such as Candler Park, Druid Hills, East Lake, Edgewood and Kirkwood.

Efforts to reach DeKalb County Chief Executive Officer Burrell Ellis were unsuccessful Tuesday.

The city council’s finance/executive committee is expected to discuss the idea at its meeting Wednesday.

The economic recession has prompted major cutbacks at City Hall. Atlanta has closed two fire stations through June, cut the work hours of its police officers, temporarily closed some recreation centers and closed City Hall for nearly all business on Fridays to deal with declining sales tax, property tax revenue and other fees. City officials believe revenues will fall about $20 million short of initial projections when the budget year ends June 30.

But the recession has not easy on DeKalb, either. Commissioners cut spending by 3 percent, $18 million, because of declining revenues and losing property tax income from the recently incorporated city of Dunwoody.

Even HOST revenues are down, from nearly $101 million collected in 2007 to about $95.3 million in 2008.

East Lake resident Kyle Caldwell believes the money from HOST can be used for projects such as building new sidewalks near Drew Charter School.

“It’s very hard to push a stroller on these sidewalks,” said Caldwell, 46, who’s lived in East Lake for more than 10 years.

Caldwell said he’s pressed DeKalb officials for years for a breakdown of how much money from HOST has been collected in East Lake and how much has been spent on projects in that community.

Archibong believes the city has not received HOST funds in recent years because it didn’t submit the proper documentation for an estimated $1 million it received in the late 1990s.

“I did not know it had been this long,” said Councilwoman Anne Fauver, who co-sponsored legislation supporting Archibong’s plan and represents portions of DeKalb. “The city tends to think of itself as Fulton County, regardless of the fact that 11 or 12 percent of its residents live in DeKalb.”

DeKalb is in a legal saga with many of its other cities over the distribution formula for HOST. The case has dragged on for more than eight years. In March, a Fulton County judge ruled the county must share some of the HOST funds with Dunwoody.