Wednesday, April 30, 2008

Athens-Clarke Proposed Budget Up By 84%

The proposed FY 2009 budget for the Unified Government of Athens-Clarke County is out – and is it a doozey. The “General Fund” operating budget jumps from $99,394,287 to $104,930,930 (a 5.57% increase), its operating budget for “All Funds” goes from $151,359,253 to $162,275,600 (a 7.21% increase), and the “Capital” portion of the budget skyrockets from $61,648,200 to $229,566,100 (a 272.38% increase).

Altogether, the proposed budget represents an increase of $178,834,247 (83.96%) over that of the current fiscal year. See pages A-5 and A-6 of the FY 2008 budget and pages A-3, A-4, and B-1 of the proposed FY 2009 budget (they are large PDFs, so expect a delay).

Also in the budget mix are 19 new personnel positions (see page B-1 of the proposed FY 2009 budget). This is important because, back during the campaign to get Clarke County voters to approve city-county unification, the sales pitch was that the overall personnel level would decrease over time through attrition. Needless to say, that has not happened – instead, the Unified Government relies on maintaining an arbitrary ratio of personnel to 1000 of population, which naturally allows the size of government to continually grow.

And . . . again in FY 2009, even if one factors out the capital budget, the Unified Government is going to be spending about a million dollars per month more just on operations.

And . . . the property tax millage rate is going up, just as I predicted last June (see page A-1 of the proposed FY 2009 budget).

And . . . property tax assessments continue to go up, even though the real estate market remains flat or even declines (see here and here).

Now I’m just waiting for the other shoe to drop when the Clarke County School District makes its proposed budget public (insofar that it does, that is).

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4 comments:

Adrian said...

Thanks for covering this. It looks like the county is as hungry to spend money as my homeowners association, and this is not the economy for beefing up services.

Anonymous said...

Oh come on James, your statement that it's gone up $229m is just a bit disingenuous -- you do know that $215m or so of that is to fund the 3 new water/ sewer treatment facilities over a 30-yr period, right?

james said...

I understand your comment – and fully expected someone to bring that up. But no, I don’t think that I’m being disingenuous.

The first bullet point of the Executive Summary for the proposed budget (see page B-1) states “The total FY09 Budget is $391.8 million, an increase of $178.8 million.” To me, the obvious question to ask is what prompts such a massive increase.

It is true that most, but by no means all, of the increase comes from the capital bond issue included in the budget (in my defense, you will notice that I separated out operating and capital expenses as separate points of emphasis rather than just lumping everything together - and the figures I cited for each come straight from the corresponding entries in the FY 2008 and FY 2009 budgets - and hopefully my math is accurate). That is why I commented on the increase in operating expenses specifically, quite apart from capital spending.

Even so, I understand about the $215 million in bonds (see page B-2, B-23, C-84, D-1, D-2, D-9 and E-24). Why “budget” the bonds this way? My understanding of how bonds work is that money would be deposited in a sinking fund every year so as to accumulate enough to pay off the principal at the bonds’ maturity. Interest would be paid over the length of that same period. Why frontload the issue amount of the bonds into a single year’s budget? I’m open to being educated here (and will freely admit that I may be missing something obvious).

Nonetheless, my larger point is that local spending, on the parts of the Unified Government and the CCSD, continues to spiral ever upward - even without considering bond issues.

Anonymous said...

Re "frontloading the bonds". I am not an accountant (I don't have that much personality!) but I believe that the way the accounting rules for govt work is that the expenditure has to be listed in the year it was initially made, even if it will be paid off over several. You will note, for instance, that it is listed one-time at full value ($215m) and doesn't appear on the line for future years' expenditures, even though the monies will be paid back over many (30, I think) years.