Politics & Government

Cobb Commission Spurns Tax Increase

Ott, Birrell opposed to raising millage rate to cut into $31 million budget deficit.

 faces a budget shortfall of more than $31 million in the current fiscal year, but one possible solution appears to be off the table:  won’t be raising property taxes.

That was the consensus at the end of Tuesday’s work session, which included an extensive presentation from Finance Director James Pehrson on the county’s fiscal hole and the options to fill it. Pehrson and County Manager David Hankerson will present a plan April 12 to get through the final five months of the fiscal year and get the county started on fiscal 2012, which starts Oct. 1.

The county’s financial picture is gradually getting worse. Falling estimates of property tax collections have increased the projected deficit this year from $28 million to $30 million in January to $31.6 million at the end of February.

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And Commission Chairman Tim Lee said real estate values are expected to fall an additional 8 percent to 10 percent per year through fiscal 2013.

The widening budget gap led East Cobb Commissioner Bob Ott to express frustration at the county staff.

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Ott said the commissioners asked for savings list in the fall and never received it, were told they would get a reorganization plan by December but haven’t gotten one, and expected the budget plan presented Tuesday back in January or February. He also complained that the county continues to fill key vacancies despite an official hiring freeze.

“I feel like we’ve lost three months,” Ott said.

Pehrson’s options for eliminating the budget shortfall included several variations of property tax increases:

  • Raising the millage rate only for the county’s fire fund (0.5 mils) and debt service fund (0.13 mils) to eliminate their deficits, resulting in a $50.40 tax increase for the owner of a house with a fair-market value of $200,000. The county portion of the property tax bill then would be $750.20.
  • Raising the millage rate for the fire and debt service funds to eliminate their deficits and boosting the rate for the general fund by 0.55 mils, enough to reduce that shortfall to the point at which one-time revenues and cuts could close the gap this fiscal year and balance the fiscal 2012 budget. Pehrson said this option would raise the tax bill on that $200,000 house by $88.90 to $788.70.
  • Filling the entire budget deficit with a millage rate increase of 0.9 mils for the general fund, 0.5 mils for the fire fund and 0.13 mils for the debt service fund. That would cost the owner of the $200,000 home an additional $113.40, for a total of $813.20 going toward the county’s $403.5 million budget.

But Ott rejected any millage increase, and Jo Ann Birrell of District 3 in Northeast Cobb and East Cobb also said she wouldn’t support such a tax increase.

Only Northwest Cobb Commissioner Helen Goreham urged that a possible tax increase, along with all potential spending cuts and other revenue sources, be kept on the table for now.

With no one else backing that position, the possibility of a tax increase ended.

That means the county will need to make up the deficit by cutting services, furloughing employees and using one-time revenue sources. A quick $8 million could come by using $6.8 million in Fund 380, which contains money left from closed-out projects; $421,000 not yet spent on planned vehicle purchases; and $965,000 budgeted for undesignated contingencies.

Each furlough day for the 4,239-person county workforce would save $671,871 for the general fund and $157,134 for the fire fund, Pehrson said.

Other money could come from selling property, a move Lee urged even if it means the county gets only 80 percent or 90 percent of the potential revenue because of the depressed real estate market.

The targets for deep cuts include Cobb Community Transit.

District 4 Commissioner Woody Thompson, who represents most of South Cobb, called for eliminating the bus service, which would save the county $13 million a year (roughly $4.6 million for the final five months of fiscal 2011) but would also force Cobb to repay $26 million in federal transit grants.

Instead of eliminating CCT, Ott and Lee advocated increasing fares and eliminating little-used routes.

“We have buses with only one or two riders running up and down Johnson Ferry Road,” Ott said.

The board also agreed that services such as the tennis centers and aquatic centers must pay for themselves, so fees should be increased to achieve that goal.

Other possibilities discussed included closing the government service centers, closing satellite libraries, reducing days or hours at libraries and other facilities, and cutting the money the county pays to nonprofit organizations such as MUST Ministries.

The attached PDF file contains Pehrson’s full presentation.


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