How DeKalb wound up with 26% tax rate hike

All of the things that set DeKalb apart in metro Atlanta collided to create the largest tax increase in the region since the recession began. But the people left footing the bill are becoming more forceful in demands that DeKalb change its ways.

“The way they’re operating, this level of division, it has to stop,” said Viola Davis, a south DeKalb nurse who ran unsuccessfully for the County Commission under the slogan Unhappy Taxpayer. “We need change.”

Chief Executive Burrell Ellis and the seven-member County Commission have battled for power almost since Ellis took office in 2009. Under DeKalb’s unique CEO form of government, the commission approves budgets, but the chief executive decides how the money will be spent. The commission rejected Ellis' two previous calls for tax hikes before voting 4-3 Tuesday to raise the millage rate 4.35 mills.

The tax hike adds $93 a year to the tax bill on the average home, which dropped in value since last year. But tax bills increase far more where home values have remained the same, with a $420 increase, for instance, on a home that remained at $300,000.

Political watchers say DeKalb is not the canary in the coal mine for similar tax hikes elsewhere. “DeKalb is probably not the canary as much as the odd man out,” said Michael Bell, the county’s finance director for 15 years who now is a professor in Georgia State University’s Department of Public Management.

Supporters say the tax increase was necessary to offset plunging property values that have hit DeKalb the hardest in the region, leaving a $37 million shortfall for 2011. Property values dropped 13 percent countywide and 18 percent in the unincorporated areas this year.

Opponents of the increase point to how DeKalb does things. It has far more employees than other metro counties of its size. It is the last metro county to offer in-house services, such as garbage collection, that other counties have outsourced.

Residents have clamored for the county to reconsider those choices for more than a year. They want the county to cut back on trash pickup, for instance, and signed off on the county’s recent increase for rec-center fees.

But more than anything, they want DeKalb to cut its staff.

“There are all these layers and layers of departments, but they’re not doing anything,” said Makedah Hubbard, an IT consultant from Stone Mountain. “They certainly aren’t budgeting. And everyone always keeps their job.”

Bell said DeKalb could have had a smaller tax hike if it had begun adjusting for its differences when Dunwoody incorporated in 2008. The county lost about $18 million a year in revenue but didn’t make corresponding budget cuts, Bell said.

Now homeowners in stable neighborhoods just south and east of Duwnoody are likely to bear some of the biggest tax hits. Their property values have mostly held steady, not dropped like much of the county.

"Our home is assessed more by DeKalb County than it is by our own insurance company," said Mary Alice Anderson, a retiree from Dunwoody. "I have issues with assessing us more than the rest of DeKalb."

When they see their tax bills, homeowners in that Brookhaven area may make DeKalb less different and more like Fulton -- and force it to lose another chunk of its population to a new city.

The question of a city of Brookhaven is already being studied. The Legislature will take up the issue next year.

Taxpayers' complaints may be making an impact, though. DeKalb is cutting spending even with its tax hike, though the 3.4 percent drop from last year’s budget is misleading. The 2010 budget of $559 million was balanced by spending all $18 million of the county’s reserves, or savings.

The 2011 budget, at $540 million, then appears to be holding steady. But the new budget calls for shuffling $22 million back into reserves to help the county get a better rating for borrowing on big-ticket items, such as a $1.35 billion overhaul of its water/sewer system.

DeKalb also had to cut from every department to offset $17 million more in pension costs and $3 million more in retiree health care expenses, said financial officer Joel Gottlieb.

“At this point, unless the market turns around, we have to find more areas to cut,” Gottlieb said. “You have to reduce the people on the payroll.”

A 2010 Georgia State study showed that DeKalb had nearly twice as many workers as Cobb and Gwinnett. DeKalb has since whittled down its payroll from 8,077 to about 7,300, mostly through early retirement and abolishing vacant spots. But that is still far higher than about 5,000 each in Cobb and Gwinnett.

“You cannot achieve prosperity through spending, but that’s what they’re trying to do,” said Tom Scott, a Chamblee resident who owns a small manufacturing shop in the city. “They need to get back to the values of living within your means.”

Tuesday’s vote in DeKalb only shores up the 2011 spending. The county runs on a calendar year and regularly adopts a final budget in July to get a better handle on spending.

By comparison, Cobb has continued to cut spending to balance its 2011 budget. But with Cobb facing a shortfall of $20 million, the county chairman just recently floated the prospect of a 17 percent tax hike for Cobb’s 2012 spending plan, which begins Oct. 1.

Both counties would be behind in asking for more. Gwinnett raised its tax rate 20.8 percent in 2009, and Atlanta raised its property tax rate 42 percent the same year.

“In instance after instance, DeKalb behaves differently,” Bell said. “If we have similar financial problems going into ’12, that won’t be able to last.”

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