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11 December 2013

Years of Budget Deficits Put Proposed City of South Fulton's Financial Viability into Question

It's been six years since residents of unincorporated south Fulton County were first asked to consider cityhood for their community. Six years later, after votes said no to becoming the City of South Fulton, they are being asked to reconsider their decision. And as expected, many of the same thoughts that entered the residents' minds then are there now.

Is the proposed City of South Fulton financially viable? Is south Fulton self-sustaining?

A Georgia Unfiltered comparison between south Fulton taxes and taxes in nearby cities show the south Fulton millage rate (12.469) is higher than millage rates [in parentheses] in Atlanta (10.240), Chattahoochee Hills (10.958), Fairburn (9.98), Palmetto (8.50), and Union City (10.598). The property tax rates in unincorporated south Fulton and the five other cities mentioned above pay for services like police, fire, zoning and planning, parks and recreation, environment and community development, and public works.

Even with some of the highest property taxes in Fulton County, unincorporated south Fulton frequently spends more money than it takes in.

Unincorporated south Fulton revenues and expenditures

2008 2009 2010
Revenues $40,151,851 $40,682,785 $43,786,602
Expenditures $46,408,325 $42,906,799 $40,135,178
Difference -$6,256,474 -$2,224,014 $3,651,424

2011 2012 2013
Revenues $37,834,514 $42,363,523 $43,344,026
Expenditures $40,870,909 $42,189,777 $50,616,535
Difference -$3,036,395 $173,746 -$7,272,509

[SOURCE: Fulton County Government]

Budget documents provided by Fulton County, from 2008 to 2013, show south Fulton ran deficits four times in six years; deficits that were covered only by a combination of money transfers from other funds and tax increases. Between 2008 and 2013, the unincorporated south Fulton property tax rate went from 5.659 to 12.469.

Fulton County, in its annual budget book, has said the tax increases were mainly due to lower property values in unincorporated south Fulton and the need to maintain the same level of service as in the previous year. In other words, to maintain the same level of police coverage; fire coverage; code enforcement; parks and recreation; and public works provided in 2007, Fulton County Commissioners had to raise property taxes in 2008. In order to maintain the 2008 service levels, Commissioners had to raise taxes in 2009. The same holds true for 2010, 2011, 2012, and 2013.

Long story short, unincorporated south Fulton County residents are paying 2013 taxes for 2007 service. And south Fulton is running deficits to pay for the 2007 level of service in 2013.

Proponents of the proposed City of South Fulton will have to explain how they plan to balance the budget, and make the new municipality financially viable, to area residents before the referendum takes place or else the results at the ballot box will be another resounding no.