Halfway into its year, DeKalb County finally has a 2011 budget, but as part of the deal, the property tax rate is going up 26 percent.
Tuesday’s 4-3 County Commission vote means a 4.35 millage increase for the 2011 budget -- and also money into savings to help the county improve its credit rating. The move will generate about $50 million more in revenue, $5 million of it into reserves.
The three members of the commission’s budget committee, who refused Monday to recommend approval of the hike, dissented.
“I am not pleased with the direction things have been going,” said Commissioner Lee May, who heads the budget committee. “There is a real financial management problem in this county.”
Even supporters of the tax hike also criticized the management of Chief Executive Burrell Ellis, who proposed the tax hike in May saying that falling housing prices would create a $37 million shortfall in the $529 million budget.
But supporters said the hike is needed to plug that hole in the budget and also rebuild the county’s shaky finances. DeKalb ended last year with no reserves, or savings, prompting credit agencies to lower its bond rating in March.
“DeKalb County needs a strong credit rating in order to protect the public in the best way we can,” Commissioner Jeff Rader said before voting to approve the hike.
The vote hands a thin victory to Ellis, while also making more cuts to departments than he proposed.
The commission’s budget shaves another $2.08 million out of various departments, including the district attorney, roads and drainage and the Sheriff’s Office. Police and fire do not see any reductions.
Rather than lower taxes with the savings, though, commissioners agreed to put the cash into reserves. That brings the savings account up to $22 million, about half the monthly cost to run the county.
The move could earn a better county credit rating later this year, saving millions on borrowing for such major projects as the $1.35 billion upgrade to the county's water and sewer system.
“I am willing to pay more if it means getting us back on better financial footing, but that doesn’t mean throwing good money after bad,” said Kenneth Taylor, a Lithonia resident who urged financial restraint with the increase. “The bottom line is, we need better management and better planning.”
Residents also will need more money. The new incorporated tax rate is 21.21 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.
Those kinds of hikes will hit northern and central DeKalb particularly hard, because many home values there barely dropped. Commissioner Elaine Boyer, who represents northern DeKalb, called the tax hike a “slap in the face” for her constituents.
Boyer, who with May and Commissioner Sharon Barnes Sutton voted against the budget, said she also worried that without long-term forecasting, no one could say another tax hike won’t be needed next year.
“We are all cutting our budgets, yet the county has refused to embrace layoffs or significant budget reductions,” Boyer said. “This vote shows the CEO and board are out of touch with what’s happening with our citizens.”
The question of more cuts or layoffs may return quickly, though. County leaders are scheduled to meet with bond-rating agencies in New York on July 21, part of the effort to get a better credit score.
Planning for the 2012 budget also will be a factor for those agencies, such as Standard and Poor's. Ellis and Chief Financial Officer Joel Gottlieb are meeting Friday with department heads to begin the 2012 budget process. Ellis is scheduled to make a recommendation for that budget in December.
"It's not going to be easy budgeting going forward," Ellis said.
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