DeKalb faces $100 million deficit

By Megan Matteucci

The Atlanta Journal-Constitution

As DeKalb County commissioners scrambled to cut
 $84 million from the 2010 budget by Tuesday, they learned the deficit may have grown to $100 million as property values continue to fall.

New figures show DeKalb’s 2010 tax digest will be about 6.7 percent less than the value of the 2009 tax digest, according to Vivian Ingersoll, chairwoman of the county’s board of assessors.

Chief appraiser Calvin Hicks said those numbers are preliminary and could fluctuate after property revaluations this spring.

But more foreclosed homes, incomplete developments and a miserable market caused the county’s property values to drop by $1.6 billion, Hicks told The Atlanta Journal-Constitution on Wednesday. The county’s tax digest is now valued at about $23 billion.

County commissioners were already trying to cut $84 million to avoid raising property taxes.

“We’re beginning to get that now,” CEO Burrell Ellis told the AJC on Tuesday. “But there is now the possibility by recent reports from our tax assessors, that the gap could widen to as much as $100 million.”

Commissioners have identified about $75 million in cuts, including an early retirement program, unpaid holidays and 10 furlough days for all employees except police and firefighters. They’ve also proposed getting rid of take-home cars, cutting money to Grady Memorial Hospital, delaying library openings and cutting the salaries of the top paid employees.

Ellis is reviewing these proposed cuts and said he expects to have a revised budget by the end of the week. The commission is scheduled to vote on the budget Tuesday.

Budget committee chairwoman Commissioner Connie Stokes said they will just have to set a tentative budget and continue to adjust it over the next few months to reflect any changes in property values.

The drop in values has also brought the school system’s deficit to $88 million, prompting the school board to consider teacher furloughs and program cuts.

“The challenges facing the school system are unprecedented,” district spokesman Dale Davis said.

County commissioners have been questioning property values since December when Ellis submitted his budget based on the assumption that property values would remain flat.

“I said our focus is on the wrong thing,” Hicks said Wednesday. “It seemed to me for us to have the opinion that there will be no change for 2010 is extremely liberal at this point.”

Hicks reviewed the numbers and found DeKalb properties are overvalued about 18 percent.

“The sales are indicating that our appraisals are running higher than market values and we need to respond to that,” he said. “The only thing we want to do is get them as right and as close as we can.”

Concrete numbers will not be available until April at the earliest after revaluations are complete, Hicks said. Residents have until March 1 to appeal their property assessments.

Falling property values are creating widespread budget worries among local governments.

DeKalb commissioners also started asking more questions after an AJC investigation found values dropped more in DeKalb than other counties in the metro area. At the time, Hicks — who had been on the job for about a month — told the AJC the values were where they needed to be.

In addition to the sagging economy, Ingersoll blames the value drop on a state law that went into effect last year that requires the county to include foreclosures and bank sales when handling revaluations.

“Regrettably, this changes things,” she said. “If seven out of 10 houses are foreclosed and have foreclosed values, then that becomes the market for the neighborhood.”

DeKalb also based its tax digest on subdivisions and other developments under construction, Ingersoll said. Some of those projects are sitting idle because builders have filed for bankruptcy and suffered other financial setbacks.

Ingersoll said she is starting to see an upswing in people buying several foreclosures and other “bargain” properties and beginning to renovate.

“They’ll flip them,” she said. “This is one of the forces that turn things around.”

Stokes said she doesn’t know when that turn-around may come so right now the county just has to focus on making cuts.

“We will still try to eliminate all the fat and protect public safety and jobs,” she said.