Making Difficult Choices
03/18/10 9:11 pm
Making Difficult Choices
by Commissioner Jeff Rader
The DeKalb County Board of Commissioners (BOC) approved a tentative 2010 budget of $565 million. That is a $17 million reduction from the budget proposed by the county CEO.
The approved budget does not propose an increase in the millage rate, which is used to calculate property tax. The budget is largely balanced by spending cuts. While county services and employees are going to be affected by the cuts, they are a necessary concession to the current economic climate. The challenge is compounded by the 27th payday, a recurring accounting anomaly that the county should have saved for, but didn't. These factors notwithstanding, the commissioners did not want to increase the millage rate.
The BOC partially rescinded budget cuts for the courts and criminal justice system that were proposed by the CEO. These operations generally are run by officials who are elected independently by the voters, thus are more independent of county control. These officials include the sheriff, district attorney, solicitor, and the clerk and judges of the courts. They claimed that the CEO's proposal to cut specialized positions would make it impossible for them to fulfill constitutional obligations, or could cost the county more in the long run. Their budgets were nevertheless reduced to 2009 levels, which will necessitate furloughs and other cost cutting by these officials.
Even with these amendments, the budget issue is far from over. The BOC officially sets the millage rate in June, just before property tax notices are mailed out to taxpayers. At that time, the BOC will have a half-year's data to update its revenue and expense projections. If there is a deficit, the BOC will have to come up with additional spending cuts or more revenue.
Already there is reason to believe there will be a deficit in the county's mid-year projections. The CEO's proposed budget was based on an estimated tax digest obtained from the tax assessors' office last fall. The tax digest is the total assessed value of residential and commercial property in the county.
After the CEO's budget was submitted, the BOC asked the tax assessor's office for an update on the tax digest. Based on more current information than was available when the CEO developed his estimate, the tax assessors' office estimated the county tax digest will decline by seven percent this year. That would translate into a loss of about $20 million in county property taxes.
To get the additional $17 million in savings, the BOC's biggest move was the elimination of seven paid holidays for county employees, starting with Memorial Day (May 31). This is a regrettable necessity given the current budget projections. The BOC also eliminated the CEO's proposed merit pay increase for county employees, take-home cars for some county employees, and at least 150 positions from the county workforce in addition to those vacated by the early-retirement offer.
Another significant variable in the budget guessing game is the county's early retirement offer to its employees. County employees have until May 1 to accept the offer. Until then, it is impossible to calculate how much the county could save in personnel costs this year.
The exercise of approving a budget now is to give county departments a tentative ceiling for their expenditures in this fiscal year, which began January 1. If the economy makes a significant gain by June, then spending cuts could be restored, including the employee benefits cited above.
However, the general consensus is the economy will remain flat or possibly even decline. As far back as January 2009, economists projected that states and local governments would be hit hard by revenue declines in 2010, in part because of the expiration of federal stimulus money and the negative trickle-down effect of the national economy.
Unfortunately, Georgia and DeKalb County, among many, were slow to react to the pending economic downturn. One of the biggest downfalls of government is its inability to be proactive or to change quickly when needed.
The county CEO could have introduced the early-retirement offer to county employees last summer with a December deadline. That would have allowed financial savings to kick in with the start of the new fiscal year and enabled the BOC to better evaluate the budget because it would have known exactly how many positions were vacated by retirement.
Another proactive step would have been to initiate a study of county departments to determine whether its staffing level was properly proportional to the services it provided. This information would have been valuable in the event the county needed to make involuntary reductions in its workforce. Personnel costs – salaries and benefits – account for about 80 percent of the county's budget.
The BOC proposed such staffing study last spring, but withdrew its proposal because the CEO's administration pledged to conduct a self-study. But the results of the administration's study, if it was done, were not shared with the BOC, which eventually in November contracted with an outside group to conduct the study. Preliminary results from that study are expected this month, but its recommendations and potential savings will not be fully realized in this fiscal year.
Another major downfall in government is its reluctance to deal with tough challenges in the present day. All too often, it is easy to defer a problem until tomorrow, confident there will always be a tomorrow. But as ordinary citizens know, when a bill comes due, there rarely is the option of putting it off until tomorrow.
Elected officials are often uncomfortable making tough decisions, such as spending cuts to in order to eliminate a deficit or to fund future obligations, because it means upsetting a segment of the population. It is human nature that people want to be liked, which means keeping others happy.
If the county CEO and commissioners want to win popularity contests, they can promise and spend for a multitude of benefits and services on behalf of their citizens. But that would be fiscally irresponsible because eventually the county would have to raise taxes or run out of money, resulting in even larger cutbacks with a deleterious impact on the quality of life.
Instead, the CEO and commissioners need to be objective in dealing with financial reality. There is not, nor will there ever be, enough money to achieve all the things needed or desired for the county. Therefore, the first principle in crafting a budget is to fulfill federal and state constitutional obligations and those mandated by the county's organizational act. The second principle is to fund those services that impact the largest group of citizens. The third principle is to help build a safety net for those who can not help themselves because we are a humane society.
In the next few months, the county will be keeping a close eye on the economic indicators, property assessment process, county expenditures, and the independent staffing study. Working all the while to control expenses, we will hope for the best and prepare for the worst.
by Commissioner Jeff Rader
The DeKalb County Board of Commissioners (BOC) approved a tentative 2010 budget of $565 million. That is a $17 million reduction from the budget proposed by the county CEO.
The approved budget does not propose an increase in the millage rate, which is used to calculate property tax. The budget is largely balanced by spending cuts. While county services and employees are going to be affected by the cuts, they are a necessary concession to the current economic climate. The challenge is compounded by the 27th payday, a recurring accounting anomaly that the county should have saved for, but didn't. These factors notwithstanding, the commissioners did not want to increase the millage rate.
The BOC partially rescinded budget cuts for the courts and criminal justice system that were proposed by the CEO. These operations generally are run by officials who are elected independently by the voters, thus are more independent of county control. These officials include the sheriff, district attorney, solicitor, and the clerk and judges of the courts. They claimed that the CEO's proposal to cut specialized positions would make it impossible for them to fulfill constitutional obligations, or could cost the county more in the long run. Their budgets were nevertheless reduced to 2009 levels, which will necessitate furloughs and other cost cutting by these officials.
Even with these amendments, the budget issue is far from over. The BOC officially sets the millage rate in June, just before property tax notices are mailed out to taxpayers. At that time, the BOC will have a half-year's data to update its revenue and expense projections. If there is a deficit, the BOC will have to come up with additional spending cuts or more revenue.
Already there is reason to believe there will be a deficit in the county's mid-year projections. The CEO's proposed budget was based on an estimated tax digest obtained from the tax assessors' office last fall. The tax digest is the total assessed value of residential and commercial property in the county.
After the CEO's budget was submitted, the BOC asked the tax assessor's office for an update on the tax digest. Based on more current information than was available when the CEO developed his estimate, the tax assessors' office estimated the county tax digest will decline by seven percent this year. That would translate into a loss of about $20 million in county property taxes.
To get the additional $17 million in savings, the BOC's biggest move was the elimination of seven paid holidays for county employees, starting with Memorial Day (May 31). This is a regrettable necessity given the current budget projections. The BOC also eliminated the CEO's proposed merit pay increase for county employees, take-home cars for some county employees, and at least 150 positions from the county workforce in addition to those vacated by the early-retirement offer.
Another significant variable in the budget guessing game is the county's early retirement offer to its employees. County employees have until May 1 to accept the offer. Until then, it is impossible to calculate how much the county could save in personnel costs this year.
The exercise of approving a budget now is to give county departments a tentative ceiling for their expenditures in this fiscal year, which began January 1. If the economy makes a significant gain by June, then spending cuts could be restored, including the employee benefits cited above.
However, the general consensus is the economy will remain flat or possibly even decline. As far back as January 2009, economists projected that states and local governments would be hit hard by revenue declines in 2010, in part because of the expiration of federal stimulus money and the negative trickle-down effect of the national economy.
Unfortunately, Georgia and DeKalb County, among many, were slow to react to the pending economic downturn. One of the biggest downfalls of government is its inability to be proactive or to change quickly when needed.
The county CEO could have introduced the early-retirement offer to county employees last summer with a December deadline. That would have allowed financial savings to kick in with the start of the new fiscal year and enabled the BOC to better evaluate the budget because it would have known exactly how many positions were vacated by retirement.
Another proactive step would have been to initiate a study of county departments to determine whether its staffing level was properly proportional to the services it provided. This information would have been valuable in the event the county needed to make involuntary reductions in its workforce. Personnel costs – salaries and benefits – account for about 80 percent of the county's budget.
The BOC proposed such staffing study last spring, but withdrew its proposal because the CEO's administration pledged to conduct a self-study. But the results of the administration's study, if it was done, were not shared with the BOC, which eventually in November contracted with an outside group to conduct the study. Preliminary results from that study are expected this month, but its recommendations and potential savings will not be fully realized in this fiscal year.
Another major downfall in government is its reluctance to deal with tough challenges in the present day. All too often, it is easy to defer a problem until tomorrow, confident there will always be a tomorrow. But as ordinary citizens know, when a bill comes due, there rarely is the option of putting it off until tomorrow.
Elected officials are often uncomfortable making tough decisions, such as spending cuts to in order to eliminate a deficit or to fund future obligations, because it means upsetting a segment of the population. It is human nature that people want to be liked, which means keeping others happy.
If the county CEO and commissioners want to win popularity contests, they can promise and spend for a multitude of benefits and services on behalf of their citizens. But that would be fiscally irresponsible because eventually the county would have to raise taxes or run out of money, resulting in even larger cutbacks with a deleterious impact on the quality of life.
Instead, the CEO and commissioners need to be objective in dealing with financial reality. There is not, nor will there ever be, enough money to achieve all the things needed or desired for the county. Therefore, the first principle in crafting a budget is to fulfill federal and state constitutional obligations and those mandated by the county's organizational act. The second principle is to fund those services that impact the largest group of citizens. The third principle is to help build a safety net for those who can not help themselves because we are a humane society.
In the next few months, the county will be keeping a close eye on the economic indicators, property assessment process, county expenditures, and the independent staffing study. Working all the while to control expenses, we will hope for the best and prepare for the worst.
(Commissioner Jeff Rader represents District Two on DeKalb County's
Board of Commissioners. He was reelected in November of 2010 for
another four-year term.)
Please encourage your neighbors to sign up for my e-mail updates. Go to my web site, www.commissionerrader.com, and click on the "news signup" link at the bottom.
Please encourage your neighbors to sign up for my e-mail updates. Go to my web site, www.commissionerrader.com, and click on the "news signup" link at the bottom.