Atlanta budget forecast leaves little room for error

By Eric Stirgus

The Atlanta Journal-Constitution

Atlanta finance officials have looked into their crystal ball and found there will be little margin for error.

The officials projected that spending will outpace revenues in the five-year economic forecast they delivered on Wednesday to the City Council's Finance/Executive Committee.

There was some potential good news. The balance for the city fund that pays for most services could be $57 million by June 2014. It was $6 million in June.

Outgoing Mayor Shirley Franklin wrote in a letter included in the presentation that the city can continue to provide services at current levels, if the economy improves. She warned the city must find additional revenue sources.

The forecast includes some presumptions. One includes that the city will sell its jail, a move that officials believe will save Atlanta about $10 million a year.

The forecast is the first of its kind for the city, which like most governments has struggled through the economic recession. The city has cut 30 percent of its workforce through layoffs and eliminating some vacant positions since April 2008.

Predictions:

Property tax growth will be flat through June 2011 and increase by 1.5 percent the remaining three years.

Health care costs for city workers and retirees will jump by almost 50 percent, from $41.9 million to $61.9 million.

Sales tax revenue will rebound, with 7 percent growth between July 2010 and June 2011 and 2 percent the next three years.

Spending will rise by 2.5 percent a year, while revenues are expected to increase by an average 1.4 percent a year.

General fund revenue projections:

July 2009 -- June 2010: $541 million

July 2010 -- June 2011: $546 million

July 2011 -- June 2012: $554.6 million

July 2012 -- June 2013: $562.8 million

July 2013 -- June 2014: $570.9 million

General fund spending projections:

July 2009 -- June 2010: $541 million

July 2010 -- June 2011: $562 million

July 2011 -- June 2012: $564.6 million

July 2012 -- June 2013: $582.1 million

July 2013 -- June 2014: $596.7 million

Figures  include about $28 million a year the city would put into a reserve fund.

Reaction:

"Based on current projections, and absent a significant new source of revenue, we will not be in a position to enhance service levels nor address several core priorities --  such as replacing our fleet and making much-needed investments in our roads, bridges and sidewalks." -- Mayor Shirley Franklin

"It's going to be doing less with less." -- Councilman Howard Shook, chairman of the City Council's Finance/Executive Committee