Cobb’s elected leaders will have to make tough decisions on taxes and spending this year if they are to avoid possibly losing the county’s coveted AAA credit rating.
The rating affects the interest rate at which Cobb can borrow money, which in turn affects how much taxpayers pay in interest.
Moody’s Investor Service and Fitch Ratings, two of the largest rating agencies, reaffirmed Cobb’s AAA credit rating this week but downgraded the county’s outlook to “negative” citing “fiscal challenges.”
Specifically, Moody’s pointed to a “projected deficit in fiscal 2018 and a sizable budget gap in fiscal 2019, likely bringing reserve levels significantly below the national medians for [AAA-rated] counties for the next two fiscal years.”
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The county is facing a $30 to $55 million hole in the budget due to successive tax cuts, a growing population and large expenditures.
Cobb is paying millions out of its general fund for the Atlanta Braves’ new stadium, a fraction of the budget gap but a powerful symbol of what many see as irresponsible spending. Meanwhile, the county implemented user fees for the senior centers for the first time and is threatening to shutter libraries.
Cobb Commission Chairman Mike Boyce, who has called for a property tax increase to address the county’s money problems, said in a statement the revised outlook a “warning shot across our bow.”
"We have been drawing down our reserves using buckets of one-time monies,” Boyce said. “But there are no more buckets to raid."
But Lance Lamberton, chairman of the Cobb Taxpayers Association, said the county can “absolutely” address its budget deficit without raising taxes. He blamed its current fiscal crunch on decisions made both before and since Boyce became chairman last year.
“It’s not that Cobb County has a revenue problem. It has a spending problem,” Lamberton said. “They need to sharpen their pencils and look for ways to economize and reduce spending.”
Taxes and the county budget are likely to dominate local elections this year. Candidates running to fill two commission seats are divided over whether Cobb should increase taxes to maintain services.