On February 23rd, the BOC approved a budget for calendar year 2019. Since this responsibility is the BOC’s primary and most important responsibility, some highlights on the process and outcomes are presented below.
DeKalb’s charter or “Organizational Act” requires the CEO to propose an annual budget for the calendar year no later than December 15th of the previous year, and requires the Board of Commissioners to approve a budget before March 1st. During the first two months of the year, the Organizational Act mandates that spending not exceed the prior year’s approved budget for that period. In my experience, the CEO and BOC have always met this schedule, but with no time to spare. Recently, the budget has been adopted without drama, due to rising revenues and a collaborative review and amendment process.
While a healthy tax digest is the product of larger economic trends, the process we’ve used has helped a lot. The Standing Committees of the BOC review each County Department and independent Constitutional Office’s budget as proposed by the CEO and hears from stakeholders on their priorities. If a Committee wants to suggest an amendment, that proposal is forwarded to the Finance, Audit and Budget Committee where they are considered and prioritized within the larger context of County’s fiscal capacity. The CEO may also propose or endorse other changes in the Administration’s prior budget, and the Finance Audit and Budget Committee endorsed a Committee Substitute for consideration by the Commission as a whole. In my tenure as Presiding Officer, I’m happy to say that the BOC has approved the Committee Substitute as proposed.
The adoption of the EHOST Tax and SPLOST sales tax has changed the budgeting environment, with the full impact of these changes beginning this year. Homesteaded property owners will continue to see elevated HOST credits against their property tax bill, lowering the cost of the County millage for homeowners. The SPLOST Sales Tax has provided additional funding for capital maintenance of our roads and other public facilities, relieving the property tax base of this burden. Overall, tax collections are higher, but because sales taxes are paid by the penny, and the property tax bill comes all at once, the burden feels lighter to some.
This year’s budget is notable for several reasons. The County continues to add to its fiscal reserves, accruing two month’s operating expenditures in fund balance, which demonstrates stability to the financial sector, and the capacity to manage costs to return budgeted but unspent appropriations to our treasury. Of critical importance is what we do with the surplus in the future. While costs will rise with population and inflation, I am hopeful that we can begin to plan to return some of this surplus to taxpayers in the form of reduced millage rates.
The BOC approved the CEO’s ongoing initiative to increase compensation to the DeKalb County workforce. In October, the CEO proposed and the Commission approved a 4% pay increase to sworn public safety personnel, which was annualized in the current budget. The CEO also won a 3% pay increase in this budget for those throughout the workforce whose pay had not been previously enhanced. Labor markets are tight, and these increases were deemed necessary to retain personnel and preserve our investment in training and experience. The more attractive pay schedule will also help to fill vacant police slots, enhancing public safety. Nevertheless, this expense becomes part of the base budget for the future, further burdened by pension contributions, and will be difficult to reduce should that necessity arise in the future.
The CEO also won approval of a 2% Cost of Living Adjustment to pension payments to DeKalb County retirees. While it has been over ten years since such an adjustment has been awarded to pensioners, the County’s Pension assets remain underfunded, assuming conservative investment returns and actuarial projections. This COLA will add over $2 million to annual pension costs, in addition to a $9 million increase in contributions required to meet minimum standards and close an unfunded liability over the next 25 years. DeKalb’s pension is a contractual obligation to our retirees, and the County has been faithful to the commitment, but such COLA adjustments for retirees are not among the assumptions imbedded in the pension formula, and are part of a growing burden on payroll costs.
There is a lot more documentation on the budget available from the County website. Use this link to find out more.