Atlanta’s housing boom will play a big role in the city’s $637 million budget for fiscal 2018, an increase of almost 1.1 percent over last year.
Property tax collections are expected to increase almost 3 percent in fiscal 2018 to about $200 million compared to $194.7 million the year before.
That means the explosion of cranes dotting the skyline from downtown to Buckhead will translate into big dollars to pay cops, pave roads and fund pension payments
“Data indicates the city of Atlanta is growing,” Jim Beard, the city’s CFO said Thursday in a briefing with media on the budget. “The value of all properties in the city should continue to go up. If you look at things like the BeltLine, it’s driving growth and prices.”
Growing that revenue will be necessary. The city’s costs are rising in several areas, including a $6.5 million increase in salary and overtime costs, $3.9 million for pensions, $1.6 million for worker’s compensation and $3.9 million for group insurance.
The city police and fire departments will also see their budgets raised — 7.09 percent and 5.13 percent respectively, Beard said. Atlanta, like most area metro cities, is putting money in the budget for police and firefighters as new communities such as Sandy Springs and John’s Creek are making recruitment and retention competitive.
Other departments, such as the planning and community development department, Mayor Kasim Reed’s office and Atlanta City Council, will see their budgets cut. The offices have been asked to cut their budgets 1.5 percent, 1.39 percent and 0.94 percent respectively.
“Most of what you’re seeing are budget changes due to personal costs,” Beard said.
The city says it expects to roll back the millage rate by 0.01 mills, but those living in areas where real estate assessments are climbing — Midtown, Buckhead, Old Fourth Ward, for instance — could see a property tax increase.
Property for housing and businesses in Georgia’s biggest city had a total assessed value of about $25.6 billion in fiscal 2017, up from $24.9 billion a year earlier.
And the city’s growth is expected to come with increased spending, with income from sales taxes rising by 1.1 percent to about $105.39 million, Beard said. Sales tax collections in 2015 were $102.2 million and $103.5 million in 2016.
The numbers come as Atlanta has $175 million in reserves and the city’s credit rating has been upgraded nine times since 2010.
“We compare favorably as a city to a lot of the AAA rated cities, even though our rating is AA+,” Beard said. “We are trying to get to that AAA rating.”
Atlanta’s fiscal 2018 annual budget is almost 20 percent higher than the city’s low point in fiscal 2013, when it dipped to $532.5 million as the nation struggled to turn the page from the economic downturn.
The city’s overall budget for fiscal 2018 is $2 billion when funding for separate self-funding enterprises such as waste management, 911 and Hartsfield-Jackson Atlanta International Airport are considered with the general fund.
There are stresses in the budget. Beard said maintenance of traffic signals and street lighting will increase 5 percent in 2018 while water and sewer will cost the city 2 percent more. Prices for natural gas and electricity are expected to be 8 percent to 10 percent higher.
“All these buildings require power and there have been some upward pressure on the price of both of those,” Beard said.
Tom Smith, an economist at the Goizueta Business School at Emory University, said Atlanta has avoided budget crunches by asking taxpayers to chip in on costs through sales tax referendums, such as last year’s vote on T-SPLOST.
“I think people may be annoyed by this, but it helps Atlanta always find a way to pay for services within their budget,” he said.
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