Two grim possibilities hang over DeKalb County as it begins plotting its 2013 budget: higher taxes two years after the largest rate hike in recent history, or the sorts of spending cuts that noticeably change basic government services.
County officials who are usually at odds have found unity in the looming cash crisis. Both CEO Burrell Ellis and County Commissioner Lee May, who heads the budget committee, say they are looking for other options to make up an estimated $40 million shortfall expected from the creation of Brookhaven and a pending annexation.
Both are singing from the same songbook that improved efficiencies, outsourcing and restructuring could save the day. Weekly brainstorming sessions will give way to formal budget meetings later this month.
Residents, though, find the tune off-key. From Dunwoody to Ellenwood, residents are bracing for expected, if unwelcome, tax increases.
“I don’t think they have a choice but to raise taxes,” said Lorraine Battles, a retired nurse who lives in what will become the new city of Brookhaven in December. “They need to cut a lot out of every department. I don’t think that will be enough, though.”
Cuts would need to be deep to cover the spread the county already expects. DeKalb projects to start its budget on Jan. 1 with 7 percent less to spend than this year’s $557 million budget. Adjusting for another year of likely property value drops and health insurance increases could further erode the budget.
The formation of Brookhaven alone will cost about $25 million in lost property taxes, business fees and other taxes. If voters just outside Brookhaven’s borders agree to be annexed into Chamblee in November, DeKalb stands to lose an estimated $5 million more.
Together, the two cities would then receive another $10 million from the county’s share of a local sales tax.
The biggest hit is likely to the service that residents and officials both prioritize: police. Early plans call for the county department to keep its $4.6 million budget, since the county must provide police protection to Brookhaven during its transition to a city force. The city and county have yet to negotiate a payment plan for that service.
But unlike the county’s decision to avoid police cuts when Dunwoody formed in 2008, it’s more likely that this time, DeKalb will reduce its 1,120-sworn officer department.
County Commissioner Jeff Rader, who along with Commissioner Elaine Boyer is the only board member pledging to vote against any tax increase, has floated one idea to make that happen.
Since cities are likely to blanket the entire northeast part of the county, Rader wants to close the north police precinct. Going from five to four precincts gives Police Chief William O’Brien a chance to save big by restructuring his command staff and eliminating excess managers, equipment and buildings, Rader said.
It also would mean fewer police officers, or at least police positions. O’Brien said a staff reduction could come from eliminating some of the 140 vacant slots in the department, without layoffs.
“We are still looking at all options, but to me, that’s my preferred action,” O’Brien said.
Without some reduction in police, some tax increase seems unavoidable. DeKalb raised its tax rate 5 percent after Dunwoody formed.
But even that kind of hike – small compared to the 26 jump in the tax rate in 2011 – would hit central DeKalb hard.
Central DeKalb - home to Emory University, the county’s biggest employer - has been the first part of the county to see property values and begin to climb. Any tax increase, then, would disproportionately hit property owners there. That burden fuels talk of forming a new city in the Druid Hills area, though many residents worry that would lead to even higher county taxes over time.
“It’s going to be painful, I know,” said Maureen Corley, a freelance video producer and copywriter from Toco Hills. “We all expect to see the county cut back, because we all have to do that sometimes. But we’ve become accustomed to libraries, the senior centers, so a tax hike is just inevitable.”
Ellis said all options, including a tax hike, are on the table. After all, voters re-elected Ellis and all county commissioners during this summer’s primary by decisive margins. There was no punishment for the 2011 rate hike, which despite its size resulted in fewer people paying higher taxes because of plunging property values.
But Ellis, charged with formulating a budget by Dec. 15 for commission review, said that table also includes new alternatives, such as changing job descriptions to reduce duplication of services.
“There will have to be some structural change that reduces our costs,” Ellis said.”It’s going to be a breaking down of silos like never before.”
One outside observer said any major changes need to be done only when DeKalb takes time to do some math that it, and other metro counties, don’t do. Simple but time-consuming calculations would reveal how much it costs, per taxpayer, to have a police officer on patrol or keep a library open, said Barbara Neuby, a professor of public administration at Kennesaw State University.
“If you can’t answer those kinds of questions, you have bigger problems than income,” Neuby said. Neuby has offered to train officials in any county in the math that needs to go into such calculations. So far, no one in DeKalb has taken her up on it, but Voncille Hodges would like to see someone pick up the phone.
Hodges said having an outside expert who can break down the costs might win over voters like her, resigned to a tax increase she doesn’t want and thinks the county might not need if it worked harder to save.
“I know they have to do something,” Hodges said. “There is no easy solution to any of this. No matter what they do, there will be somebody who doesn’t like it.”
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