From parks to the CEO’s office, all DeKalb County departments must trim two percent of their budgets immediately and have until June to figure out how they’ll cut another three percent of spending.
Chief Executive Burrell Ellis ordered the 5 percent budget cuts and a hiring freeze late Thursday to slow spending just a month before countywide property values, known as the digest, are announced for the year. If the county's taxable property has fallen more than the 5 percent projected in the 2012 budget, residents can expect deep service cuts later this year.
Last year, residents got a double-digit hike in their property taxes to make up for the loss of property value. This year, commissioners have pledged not to raise taxes again.
Ellis' budget cuts extend to all departments his office runs except police, in a bid to temper future cuts. It does not cover big-ticket Constitutional offices, such as that of the sheriff and district attorney. The cuts add up to about $8 million sliced from the $559 million budget.
“With the combination of all the things before us, we thought it important to ask our departments to scale back,” Ellis told the Atlanta Journal-Constitution Friday. “There are a number of unknowns.”
DeKalb has had a mixed financial year in 2012. After raising the tax rate a historic 26 percent last year, successes this year include adjusting fees expected to bring in an additional $3 million and rebuilding rainy day funds to $30 million – a huge feat after starting 2011 with no money in reserve.
But the county also failed to convince the state Legislature to increase its hotel/motel tax, costing $1 million that the 2012 budget counts on.
The county also could lose at least $20 million in income -- including property taxes, business licenses and other fees -- if Brookhaven residents vote to become a city later this year and at least $10 million more from proposed annexations that would move county land into four different cities. Most of those hits will affect the 2013 budget.
County commissioners have warned of those looming losses for months while also complaining that Ellis’ forecast of a 5 percent drop in property values is too optimistic.
DeKalb values plunged 21 percent between 2009 and 20011. Values in metro Atlanta were down 12 percent in December, compared to the year before, according to the Case-Shiller Home Price Index.
“If the metro is down 12 percent, it would be a miracle for us to just see a 5 percent decline,” said Commissioner Elaine Boyer, a member of the board’s budget committee who has pressed for more cuts since Ellis unveiled his budget in December.
“If you ride around DeKalb like I do every day, it doesn’t feel like much has changed,” she added. “We still have lots of foreclosed homes, lots of empty storefronts.”
Ellis and the commission do not directly control budgets of Constitutional offices, such as that of the sheriff or courts, but Ellis has asked them to voluntarily make cuts. None have yet to agree.
Several Constitutional offices were among those that overspent last year, including the 5.5 percent overage by District Attorney Robert James. Only Ellis’ office, at 9 percent, was more in the red.
This year, the commission agreed to add more than $900,000 to the $8 million budget for the District Attorney's office recommended by Ellis to cover a grant match and to supplement attorney salaries. A spokesman for the office confirmed Friday that the district attorney had been asked to make budget cuts, but had no further comment.
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