Report finds new DeKalb cities could cost county millions

This map shows the areas of DeKalb County studied by the Carl Vinson Institute. The area in blue is the proposed city of Greenhaven, while the area in darker yellow would be Vista Grove. The areas in white and light yellow would remain unincorporated if both proposed cities became a reality. (Photo via Carl Vinson Institute)

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This map shows the areas of DeKalb County studied by the Carl Vinson Institute. The area in blue is the proposed city of Greenhaven, while the area in darker yellow would be Vista Grove. The areas in white and light yellow would remain unincorporated if both proposed cities became a reality. (Photo via Carl Vinson Institute)

A first-of-its-kind study for DeKalb County found that two proposed new cities could cost the county millions in lost tax revenue.

The report, conducted by the Carl Vinson Institute of Government at the University of Georgia, analyzed the potential economic effect if unincorporated parts of the county were to become cities. Over the past several years, groups have pushed for the creation of the cities of Vista Grove in north-central DeKalb and Greenhaven in southern DeKalb. If both cities were to form, only small pockets of the county would remain unincorporated.

The municipalization movement that began in Fulton County in 2005 has also taken off in DeKalb, which now has 12 cities. The creation of Vista Grove and Greenhaven is expected to again be debated during the 2020 state legislative session. Lawmakers have the ability to sponsor bills that would allow residents to vote whether to create new cities.

But several representatives and senators from DeKalb have said they needed more information on the potential new municipalities before making judgments on them.

In May, a new steering committee consisting of legislators, county officials and city leaders announced it would spend $84,000 for the study. A full report is set to be released in January, but researchers presented their general findings to the steering committee last week.

The Carl Vinson Institute based its analysis on revenue the county made in 2018 that would have theoretically gone to the new municipalities if they incorporated. For each of the areas studied, the lost revenue would be costly to DeKalb, implying layoffs of county employees, researchers said.

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Vista Grove and Greenhaven proponents have rallied at the state Capitol in support of cityhood referendums.

Credit: EMILY HANEY / EMILY.HANEY@AJC.COM

Vista Grove and Greenhaven proponents have rallied at the state Capitol in support of cityhood referendums.

Credit: EMILY HANEY / EMILY.HANEY@AJC.COM

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Vista Grove and Greenhaven proponents have rallied at the state Capitol in support of cityhood referendums.

Credit: EMILY HANEY / EMILY.HANEY@AJC.COM

Credit: EMILY HANEY / EMILY.HANEY@AJC.COM

Vista Grove would be located in central DeKalb, south of Brookhaven, Chamblee and Doraville and north of Tucker. If it became a city, the county could miss out on more than $31 million a year. After accounting for the funds the county currently spends on various services, the report projected an overall loss to the county of $16.8 million. Its financials are dire for the county because leaders of Vista Grove have said they want to implement their own police service, meaning the new city would not need to pay the county for policing.

If Greenhaven were to become a city — spanning the remainder of unincorporated south DeKalb County — the county could lose almost $24 million in tax revenue, with the county suffering a net loss of $2.9 million, the study found.

Researchers also considered the potential impact if the remainder of north-central DeKalb were to become a city and transfer police service from the county. In that case, the county could say goodbye to more than $50 million a year in revenue, losing more than $26 million overall.

Paula Sanford, one of the UGA researchers who worked on the report, clarified that the numbers are “not cumulative. This is one snapshot, one year.” The county would have to take steps to offset the budget losses projected in the study, she said.

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