By Justin Reedy
Even as Clayton County officials draft their budget for the coming fiscal year, the county continues to struggle with sales tax revenue well below expected levels from the ongoing nationwide recession.
County officials say they don't expect to have to raise property taxes this year to overcome the shortfall, but will instead propose a one-percent sales tax increase that could go on the ballot in September.
The airline slowdown and general recession after Sept. 11, 2001 hit Clayton County hard, with a decline in sales of concessions and jet fuel at Hartsfield Atlanta International Airport causing a drop in sales tax revenue collected by the county. Clayton County takes in one-sixth of the sales tax collected in the county, or one penny on every dollar spent here, through a local option sales tax, or LOST.
During the fiscal year following 9/11, the county had to overcome a $10 million budget shortfall from the sales tax decline, according to Clark Stevens, administrative assistant to the county commission chairman.
The county had estimated it would receive about $44 million in sales tax revenue that year, Stevens said, but only took in about $34 million. During this fiscal year, he added, the county is on pace to take in about that same amount n $34 million n and though they had planned for that to happen, that still represents a major drop in revenue from previous years.
"We've lost about $20 million from our estimates," Stevens said. "It's been tough on us."
County budget writers have been taking that ongoing sales tax revenue shortfall into account, Stevens said, as they prepare the budget for the next fiscal year, which begins July 1. The budget draft, which will be released soon, is expected to include a slight increase over spending from last year's budget, which included expenditures of about $177 million.
"We're giving close attention to areas of the budget that have been problematic while still recognizing that revenue is down," said Crandle Bray, chairman of the county commission. "We're trying our best to balance things creatively in a tight budget."
The county will likely have to raise the general fund property tax millage rate slightly, Bray said, but will drop the fire department millage somewhat, hopefully causing no net increase in property tax bills of local property owners. The fire department will see a bit of decrease in funding because of that adjustment, Bray said, but with some experienced, high-salaried firefighters retiring in the last few months the department won't suffer from the cuts.
Other county departments could see increases in their budgets this year, Bray said, such as the sheriff's department, which has struggled to run the county jail with the number of personnel on staff.
"(Sheriff Stanley Tuggle) is cognizant of the fact that money is tight," Bray said. "He's been very cooperative."
The police department could also see staff increases as the county's population continues to rise, he said, as will the finance department, which is facing tougher auditing requirements from the state that will require additional personnel.
To help the county deal with decreased revenue without having to increase property taxes, Bray said the commission plans on asking voters to approve a one-percent special purpose local option sales tax, or SPLOST, to fund improvements to the county's road system and construction and renovation of public recreation facilities. Such a tax is put in place for a specific amount of time or until it collects a certain amount of money; this proposed SPLOST would last for five years or until $240 million is collected.
Voters rejected a one-cent SPLOST last fall that would have funded about $200 million in local road improvements, but Bray thinks the county can be more successful this time around.
"The key to this thing is that you've got to communicate with the people," Bray said. "We've got to explain to them we're not trying to build new roads, we're trying to maintain the existing roads. What we have to do is convince people this is mainly maintenance."
In addition, Bray hopes to communicate to voters that implementing a penny tax will raise money from people who live out of the county in addition to local residents, since shoppers come to Clayton County from other parts of metro Atlanta. If the SPLOST isn't approved by voters, Bray said, the county will likely have to raise property taxes to pay for road improvements and other projects.
"If we don't do a special purpose tax, we'd have to come back and do what we can with the millage," he said.