Projections of DeKalb tax hike creating rift

The commission’s budget committee will meet at 11 a.m. Thursday to begin discussing compromises to reduce spending and to consider public input.

The prospect of socking DeKalb County taxpayers with a tax hike as big as a 25 percent next year has created the first real rift between interim CEO Lee May and the county commission whose budget committee he once led.

May’s $584 million budget proposal would not require a tax rate increase this year. But forecasts show that it sets the stage for a big jump for the budget that begins next January. May says he won’t propose a tax increase then, either.

He originally proposed a $562 million budget for this year, amending it to $584 million this week. The additional money comes mostly from greater-than-expected balances in 2013 and savings from refinancing debt.

May wants to use part of the increased spending to give all county workers a 3 percent raise – their first in seven years. He also wants to hire 66 new workers.

Early projections that May himself requested, though, show the increased spending now could force the tax rate up about 20-25 percent next year, even if property values rise.

Some new hires, such as seven additional code enforcement officers, may survive, but the pay raise appears unlikely to win board approval without major changes.

“None of us have been able to give (a pay raise) and wanted to, but now is not the time,” said Commissioner Elaine Boyer, one of May’s staunchest allies on the board’s budget committee. “We have to be able to reduce the workforce of the county first. Next year there will be a huge impact if we increase spending now.”

Employees peppered May with questions about the likelihood of a pay increase in his first meetings as interim CEO this summer, when he took over for suspended CEO Burrell Ellis.

As budget committee chairman, May had challenged Ellis repeatedly on county spending in past years. He, Boyer and Commissioner Sharon Barnes Sutton dissented on the 2011 budget that raised the tax rate 26 percent.

May has built consensus with his former board colleagues on other policy issues, but he said he will fight for the raises. At issue is employee morale, he said, which will help make DeKalb more competitive and offer better service to residents.

May has pledged two things: that the 2015 budget will not include a tax increase; and to include pay raises this summer when the commission adopts a final budget and sets the tax rate for this year.

“I recognize that means we have a lot of substantial work to do,” May said. “We have to look at our staffing sizing, streamlining our management, outsourcing services and, frankly, job cuts. But to me the pay raise is just as critical to the success of DeKalb County in the long run.”

Commissioners will hold a public hearing Thursday morning on the budget. A committee meeting will immediately follow, to help members hash out a plan to move forward.

So far they appear inclined to hold a $13.3 million windfall, from savings from 2013, in reserve.

Of that, $3.3 million could cover the pay raises for this year, which May proposes start July 1. The ongoing annual cost would be about $6.6 million.

Holding some of the money still would free up other new cash, such as the $5.3 million saved in bond refinancing, to spend.

But it also keeps the bulk of the money in county accounts until midyear, when tax collections are more clear and forecasts can be refined to include factors such as new cities in DeKalb.

“There are real concerns about how we spend, or don’t spend, that additional money,” said Commissioner Kathie Gannon. “That is a discussion we still need to have.”