ATLANTA GENERAL FUND BUDGET -- FY 2009 Begins July 1, 2008
The FY 2009 City of Atlanta General Fund Budget has received a lot of attention in the press and my office has received many emails and phone calls as well as public comments at hearings about the Mayor’s proposed tax increase. Here is my update.
As you’ll recall from press reports, Atlanta’s newly implemented financial reporting software alerted us halfway through FY 2008 that expenses were projected to be more than revenues. In January there was a projected $70 million shortfall. (You can see the independent auditor’s report on-line.) Mayor Shirley Franklin quickly implemented cutbacks and hiring freezes which seem to have closed that gap and we expect to hear when the books are closed, that FY ’08 will come in on-budget.
Because each municipal budget is based on the revenues of the prior year (we can anticipate no more than 99% of the prior year), the development of the 2009 budget with no significant changes to 2008 service levels and spending began with a $140 million shortfall. The Mayor’s proposed budget of $583 million addressed the shortfall by eliminating 441 General Fund jobs, reducing employee benefits, privatizing several functions, raising various user-fees, and increasing property taxes.
While the Administration believed that the additional taxes were needed to maintain and increase service levels, the Council felt that a tax increase was not the best solution. The Council studied the proposed budget, searched for new revenues and additional cuts. As a result, we came up with the following amendment to the budget:
1) Additions to Budget Shortfall
- Eliminate the Mayor’s proposed tax increase (.43 mill) $12,000,000
- An additional .118 mill property tax rollback $3,325,000
- Restoration of funding for the following:
Public Defender and Solicitor’s Office $3,400,000
Code enforcement officers $654,100
Planners $309,900 - Equipment purchase to ensure 24 hour operation of Channel 26 $150,000
- TOTAL $19,839,000
2) This to be funded by the following Reductions to the Budget Shortfall:
The sale of taxicab decals (CPNCs) currently held by City $2,000,000
Reduction in the Council budget $1,300,000
Reduction in excess allocation in non-department budget $1,700,000
Increase to traffic fines $264,000
2.5% additional decrease to General Fund (including City Council) $14,575,000
TOTAL $19,839,000
The Council unanimously believes that the approved budget can be implemented by taking the additional General Fund cuts from “supplies” and “consulting”, elimination of some vacant but funded positions, and additional revenues that were discussed in our deliberations but would have to be applied to next year’s revenues, such as the sale of tax delinquencies.
We have another projected difficult year ahead of us. This budget must be carefully monitored from day one---7/1/08--- and we must continue to search for additional revenues and additional cuts.. We must strive for good service delivery and allow for full cost recovery from our city services. We would like to avoid future tax increases. We must bring on line quickly the contract for traffic enforcement because it is a revenue producer. I will continue to explore the sale of tax delinquencies. We are looking at various services that might bring some efficiency if outsourced.
The Council has called for a monthly financial report from all departments as we begin this fiscal year. Additionally, legislation by Muller and Shook has been approved to establish a tightly controlled Restricted Reserve. The practice of budgeting the estimated “cash carry forward” will be eliminated and any such funds would go into this reserve.
A week before General Fund Budget adoption, the Council approved a second four year series of water-rate increases to service the bonds that fund the Clean Water Atlanta program. Rate increases were anticipated in the original approval of the program, but have to be approved every four years. The MOST (Municipal Option Sales Tax) helps to lower these increases, but does not eliminate them. The rate increases are high but necessary to service the debt of the federally mandated program for water/waste water. These fees fund the program in the WATER/ SEWER ENTERPRISE FUND. The Council did not believe that in these difficult economic times the public could bear a tax increase for the GENERAL FUND as well as a water rate increase.
CLAIR MULLER
FYI-
A property tax bill consists of taxes levied by each of the following entities: The State of Georgia, Fulton County (or DeKalb County), Atlanta Public Schools (APS), and the City of Atlanta. It is important to note that approximately 21 cents of the tax dollar goes to the City of Atlanta. The remaining 79 cents supports Atlanta Public Schools (54 cents), Fulton County (24 cents), and the State of Georgia (1 cent).
