Monday, October 8, 2012

Tax increases looming for DeKalb County?

The AJC has another thought-provoking item on annexation, where April Hunt describes how the establishment of new cities impacts us, as unincorporated DeKalb residents:

1) The math will not be pretty for our area because our home property values have fared better than other areas of the County, which means the County must depend on our property taxes to compensate for shortfalls, if services for all County residents are to be protected.

It is important to remember that although our side of DeKalb County boasts very large employers (Emory University, the Centers for Disease Control and Prevention, the Veteran's Administration Hospital), these organizations are not commercial and therefore do not pay taxes to the County. These organizations are critical to the County (they create jobs, fuel property values for nearby neighborhoods, and by drawing people to the area, create commercial opportunities that feed back into the County's coffers) but, by virtue of their size and the population density they create, they also place significant demands on the Country's infrastructure. City residents derive great gains simply by living close to these employment centers.

2) The removal of commercial tax income unequally impacts County residents.  The formation of new cities such as Brookhaven, or annexation plans such as those proposed by the City of Decatur, (which targets Suburban Plaza and Emory Commons shopping centers) reduces the County's income via commercial property. To cope, the County must increase property taxes, reduce services, and find additional economies. Ms. Hunt's article addresses some changes already being considered (closing a police precinct).

How much of a shortfall is the County facing? Per the AJC:
... Cuts would need to be deep to cover the spread the county already expects. DeKalb projects to start its budget on Jan. 1 with 7 percent less to spend than this year’s $557 million budget. Adjusting for another year of likely property value drops and health insurance increases could further erode the budget.
The formation of Brookhaven alone will cost about $25 million in lost property taxes, business fees and other taxes. If voters just outside Brookhaven’s borders agree to be annexed into Chamblee in November, DeKalb stands to lose an estimated $5 million more.
3) Nearby annexation targets

How would City of Decatur's commercial annexation goals impact the County? Per a document posted on the CoD's website, which the Decatur-Avondale Patch summarizes, Decatur would wind up with
Added population: 2,028 (2010 census was 19,237 for the current city).
Added number of students in the City Schools of Decatur: 230 to start with, 400-430 in eight-10 years (Current student population is 3,627).
Added property tax for city government: About $1 million yearly, without exemptions.
Added property tax for city schools: About $1.7 million yearly, without exemptions.
Total added value: $175,879,561 billion (About $62.8 billion in land, $113.1 billion in buildings.)
Added costs for city government and the school system: Not determined.

This paints a different picture from another document in CoD's annexation page [see questions 20 and 21] that minimizes the impact to the County by saying that annexation lightens DeKalb County's service burden. What does it mean for a municipality to "gain" such 

When City of Decatur (yr. 2011 population of 19,555) sequesters commercial property tax from DeKalb County (yr. 2011 population of 699,893), it is not exactly an equal exchange for all County residents. Another
The article highlights another disturbing reality: the need for better planning. In order to fully understand the situation, we (whether city or county residents) need accurate figures of existing vs. projected needs, and well-considered plans for addressing shortfalls. But the AJC warns us that
... One outside observer said any major changes need to be done only when DeKalb takes time to do some math that it, and other metro counties, don’t do. Simple but time-consuming calculations would reveal how much it costs, per taxpayer, to have a police officer on patrol or keep a library open, said Barbara Neuby, a professor of public administration at Kennesaw State University. 
“If you can’t answer those kinds of questions, you have bigger problems than income,” Neuby said. Neuby has offered to train officials in any county in the math that needs to go into such calculations. So far, no one in DeKalb has taken her up on it... continue reading @ AJC
Is there anything we can do?