Originally created 12/02/05

Augusta tax increase certain



It's not whether Augusta commissioners will raise the property tax rate to balance the 2006 general fund budget, but by how much.

"We are going to have a tax increase, but we're going to keep it as low as we can," Commissioner Don Grantham said after Thursday's budget meeting, during which commissioners received four options for balancing next year's budget.

City Administrator Fred Russell and Finance Director David Persaud have until Monday to come up with one firm proposal to present to the board, which must take action on the budget during its first meeting in December. That meeting was moved to Monday because of Tuesday's runoff election.

Two of the proposals include Mr. Russell's recommended 1.92 millage increase and two include smaller amounts, but Mr. Russell is sticking by his recommendation.

A mill is one-tenth of a penny.

"Even with the increase I have suggested - 1.92 mills - we still have the lowest taxes of any similar-size city in Georgia," he said. "Citizens get a good deal, but can it continue forever? No. Sometimes you have to pay the piper."

Mr. Russell said his proposed increase will raise the taxes on a $100,000 house by $77 a year.

One budget option calls for eliminating 46 positions to save $1.5 million a year. Commissioner Bobby Hankerson asked Mr. Russell if he had thought of which 46 positions he would cut.

"No," Mr. Russell said. "I haven't given it much thought because I hoped that wasn't the direction you would go."

However, he added, if commissioners opt for that scenario, the jobs would be mid-level management or higher because those salaries would have the necessary impact. Eliminating salaries of a laborer would not be significant, he said.

Each option would take some money from the city's undesignated reserve funds, which totaled $21.7 million at the beginning of this year but have been reduced by about $2 million with more to come to balance the 2006 budget, according to Mr. Persaud.

Based on this year's tax digest, a 1 mill increase would raise $3.6 million.

The general-fund budget covers law enforcement, the judiciary and many other government operations and is funded wholly with tax money, according to Mr. Russell.

After presenting the options Thursday, Mr. Russell asked commissioners to give him some direction on the options they wanted him to pursue so he could present them with some final numbers.

"Go find us $3 million," Commissioner Don Grantham said.

Reach Sylvia Cooper at (706) 823-3228 or sylvia.cooper@augustachronicle.com.

Option 2

Revenues: $106,056,440

+ From reserves: $3,825,570

+ Millage increase: $6,924,150 (1.92 mills)

= Total: $116,806,160



Expenditures:

Operating expense: $118,006,160

- Salary savings from vacant positions: $1. 2 million

= Total: $116,806,160

Option 2

Revenues: $114,480,590

+ From reserves: $2,325,570

+ 2 percent tax digest + growth: $540,000

= Adjusted budget: $117,346,000

- To reduce 1.92 mill increase to 1.09 mills: $3,004,040

Adjusted Revenues: $114,342,120

Expenditures: $114,480,590

+ Cost for 4 percent raises in 2005: $2,325,570

= Adjusted budget: $116,806,160

Proposals for Reducing Expenditures:

- Cut Administrator's Office Performance Evaluator: -$82,290

- Departmental cuts: -$879,730

- 46 positions eliminated: -$1,502,020

Total: -$2,464,040

Adjusted Expenditures: $114,342,120

Option 3

Revenues:

$114,480,000

+ From reserves: $2,325,000

+ Digest growth: $540,000

= Adjusted budget: $117,346,000

- To Reduce 1.92 Mill Increase to 1.5 mills: $1.52 million

Adjusted Revenues: $115,826,160

Expenditures: $114.480,590

+ Cost of 4 percent raises in 2005: $2,325,570

= Adjusted budget: $116,806,160

Proposals for Reducing Expenditures:

- Cut Administrators Office Performance Evaluator -$82,290

- Departmental cuts: -$879,730

- Reductions needed: -$17,980

Total: -$980,000

Adjusted expenditures: $115,826,160

Adjusted expenditures: $115,826,160

Option 4

Revenues:

$114.480,590

+ From reserves: $1,785,570

+ 2 percent digest growth: $540,000

= Adjusted Budget:

$116,806,160

Expenditures:

$114,480,590

+ Cost of 4 percent raises in 2005: $2,325,570

= Total: $116,806,160