Flood-damaged cities hardest hit as Cobb's tax digest declines

By Janel Davis

The Atlanta Journal-Constitution

More budget cuts — but not tax increases — could be on the horizon in Cobb as city and county officials work to offset declining tax revenues.

Cobb’s tax digest dropped 6.9 percent this year, but the cities in the county hard hit by September’s floods suffered the worst, with digest declines in the double digits.

In Austell, where more than 700 properties were damaged in the flood, the digest plunged 18 percent, or $44 million, to $195.2 million this year.

Powder Springs saw a 16 percent, or $74 million, digest decline from 2009, to $392.5 million this year.

The tax digest is the value of real and personal property in the county used by city and county officials to estimate revenues and determine budgets.

“We began notifying local governments back in December that the digest would go down and that it could in fact reach double-digit figures,” said Cobb Chief Appraiser Phil Hogsed, who had outlined a  worst-case scenario of a decline between 9 percent and 11 percent countywide.

Still, the county's decline of $2.3 billion from last year to $31.4 billion is the largest drop since at least 1997, the earliest year for which records were provided by the tax assessor’s office.

The housing downturn has taken a toll throughout the metro area.

Gwinnett County’s tax digest fell between 8 percent and 9 percent this year. DeKalb County’s digest dropped 3 percent. Fulton County’s 2010 tax digest has not been published.

Budget adjusting in Powder Springs has been ongoing, said Mayor Patricia Vaughn. In anticipation of the digest decline, the city increased the amount employees pay for insurance costs from 20 percent to 30 percent in fiscal 2011, which began July 1. Also, two part-time and two full-time positions are not being filled.

The city manager plans to ask the council for a freeze on nonemergency spending for the next quarter, Vaughn said.

“The possibility is out there that we could still have to have a reduction in force,” Vaughn said. “We are doing everything we can first before we consider that.”

Powder Springs employs 88 people.

Austell officials budgeted for $200,000 less in revenues for fiscal 2011 in anticipation of the digest, said Mayor Joe Jerkins. In all, about $390,000 was cut from the city’s $12 million budget, he said.

“We cut things that we could get by without. We didn’t cut anybody’s salary or lay anyone off,” Jerkins said. The city also is paying for a 16 percent increase in employee health care costs. “We’ll be OK. We just have to be careful with it.”

County officials implemented a retirement incentive for employees earlier this year in anticipation of the revenue declines for fiscal 2011, which begins for the county in October. Overall, 236 employees took advantage of the incentive, which is expected to save $6 million.

“We’ve still got a lot of places to look to cut fat and have done that for two years. At some point you wonder if you’re going to do that without diminishing services,” said Woody Thompson, commission vice chairman.

To make up remaining funding gaps, Commissioner Helen Goreham recommends a possible across-the-board reduction in salaries for all county employees, including commissioners. Reducing library and pool hours and some parks and recreation programs are also potential areas for budget cuts, she said.

Despite the significant digest declines, there is no appetite for tax increases among county and city officials.

“You never want to raise taxes at times like this,” Thompson said. The commission has held the county’s millage rate at 9.6 mills for four years.

“We certainly can’t cut it any more, but it’s almost like adding insult to injury if you raise it, no matter how small of an amount,” Thompson said.

Austell and Powder Springs have had the same millage rates for several years, and plan to keep them at that level when they are decided this month.

Cobb’s school board passed a fiscal 2011 budget in June that assumed a millage rate increase from 18.9 to 20 mills, but excess money collected through a special tax would be used to offset the rate increase. County residents would not see an increase in their tax bills. The Marietta school board is expected to keep its millage rate at 17.9 mills when it votes Monday.

Other smaller metro area jurisdictions also have seen their tax digests drop. In Gwinnett, Snellville’s digest dropped 10.8 percent, resulting in a millage rate increase. Duluth also passed its first millage rate increase since 1984 to help stem a revenue shortfall from a 10 percent drop in its tax digest.