First, the good news for DeKalb County property owners: No tax hike is included in the 2013 budget county commissioners are expected to approve Tuesday.
The potential bad news: business leaders think one of the proposals to get the budget down will end up hurting DeKalb’s ability to recruit and retain businesses, which could translate into ongoing service cuts or tax hikes for years to come.
“People think we’re a beer and wine distributor, but what we are to most people is a generator of property taxes and collector of local taxes,” said Steve Craine, who recently stepped down as CEO and now works as a consultant for Eagle Rock Distributing. “People in business are shaking their heads, because you don’t get the feeling the county cares about making the changes to keep that money flowing.”
The problem is that $600,000 that’s included in an earlier budget proposal to fix the county’s woefully outdated permitting and licensing system — all of the paperwork needed to get new businesses up and running and expanding ones already on the ground — is now gone.
The funding wasn’t in the cards when DeKalb CEO Burrell Ellis in December proposed a 1.69 mill increase in the 2013 budget, or about $45 more a year in taxes on a home valued at $200,000.
But after ending 2012 with nearly $9 million more than expected, Ellis last month adjusted the proposal to .64 mills – or about $20 for the same home. The new proposal called for funneling $900,000 into its overwhelmed planning department. That bureaucracy – which oversees everything from reviews for new sites to building permits to business licenses – has the main source of complaints from companies and business groups for years.
Gripes began when DeKalb began slashing its planning staff about five years ago as money from property taxes dried up from the down economy.
After eliminating two code officers in 2013, it will have just 60 full-time workers to handle nearly every step of the development process.
The result: Last year, the county took 42 days on average to issue a permit for a single-family home, the simplest type of construction. A permit for a new office took 99 days, or more than three months, according to county documents.
By comparison, officials in Cobb and Gwinnett say they issue permits for homes in two to four days. Nearly all commercial permits, no matter how complicated, are issued within a month.
“Less time waiting means more time working,” said Bryan Lackey, Gwinnett’s planning director.
Ellis recently hired Luz Borrero to update the department – which now handles all applications only on paper and typically after long waits in line – much as she fixed the same office in Atlanta.
Atlanta hired a consultant to help find bugs, then spent millions to update its computer systems and streamline the paperwork. In the end, it cut the wait for permits in half and, more importantly, buffered its image as business-friendly.
“There is a return on investment on these things,”said Borrero, who filled the newly created deputy chief operating director of development job in December. “Once you make the county much more attractive for businesses, you gain more economic development.”
County commissioners, while supporting the idea, are reluctant to commit the funds. They have agreed to spend $300,000 in 2013 – the money to pay a consulting firm to help analyze breakdowns in DeKalb’s process.
Lee May, who heads the commission’s budget committee, said the board can approve more money if that study is completed by year’s end.
But considering it will likely cost upward of $2 million to make the necessary fixes, most spending should come from next year’s budget, he said.
“The thing is, if we raise taxes, we need to make sure it’s a long-term strategic move,” May said. “That modest tax increase (Ellis proposed) is just to handle today, and it doesn’t mean we won’t need more in the near future.”
With home values continuing to slide in nearly all neighborhoods but those in Central DeKalb, though, even the small tax hike would not mean more taxes for most homeowners.
Residential values have plunged countywide by 24 percent since 2008. But commercial and industrial values have dropped just 8 and 16 percent, respectively, in that same time period.
Businesses also don’t qualify for a special sales tax in DeKalb that offsets residential property taxes.
That means DeKalb firms haven’t seen their tax bills drop in the down economy the way some homeowners have, and explains why some long-time champions of the county have soured on staying.
For Eagle Rock, it means after 24 years in DeKalb, the firm will move operations to Norcross by summer. The relocation means 185 lost jobs from near Stone Mountain and the chance to add 150 more that are moving to Gwinnett from the company’s Dalton location.
The move, announced last month, is an especially hard hit to the Stone Mountain Community Improvement District. The self-taxing district, created two years ago, had hoped to create 2,000 new jobs by year’s end in what is one of the last development zones in the unincorporated county.
Instead, district President Emory Morsberger said organizers are trying to halt the loss of jobs. “I know times are tough, ” said Morsberger, “but times are just going to get tougher if businesses keep moving out instead of in.”
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