Pension break for new cities in DeKalb scrutinized

Georgia legislators will have to change state law if they want residents of new cities to contribute to DeKalb County's pension debt at the same rate as they did before incorporation.

DeKalb’s government is researching the issue before making a recommendation to state lawmakers in the coming months, said county spokesman Burke Brennan.

“Conventional wisdom has it that it will require a change in state law to create a mechanism to equitably distribute the tax burden of legacy pension costs,” Brennan said.

Voters will decide whether to create the cities of LaVista Hills and Tucker during a Nov. 3 referendum. Legislation is pending to form two other proposed cities, Greenhaven and Stonecrest, in South DeKalb.

City residents don’t have to pay as much as unincorporated residents toward the county’s pension, which had an unfunded liability of about $666 million earlier this year.

That's because when cities are created, they typically take over responsibility for police, roads, parks and transportation, meaning tax dollars for those services are no longer distributed to the county. The county uses part of that money to fund its pension.

A task force put together by Interim DeKalb CEO Lee May last year proposed requiring new cities to continue paying off the pension debt. The task force suggested creating a special tax district made up of the county's current unincorporated area.