Where Does the Money Come From to Support Cities?

It was a great day yesterday at Oak Groove, where hundreds of people stopped by to ask about the city efforts. A lot of the questions showed that misinformation has been much more successful than information. So many comments were made about “taking money from the county”, and “there has to be more new taxes involved”. So I thought I’d try to break this down a little.  I know that any time we get into money discussions eyes glaze over; but please humor me.

Let’s do a quick analysis of the money.  I’m using the revenue estimates for the City of Briarcliff provided by the Carl Vinson Institute of the University of Georgia. These figures will at least give a perspective on the financing.

CVI revenue estimate (in millions of dollars):

·         Real Property taxes                      $10.8          20%

·         HOST sales tax                                8.1          15%

·         Utility Franchise fees                         8.1         15%

·         Occupation Taxes/Bus License           4.8           9%

·         Insurance premium tax                     4.6           9%

·         Fines                                              4.1            8%

·         Storm Water Fund                           3.0            6%

·         Development Funds                         2.8            5%

·         Hotel/Motel taxes                             1.9            4%

·         Beverage Taxes                               1.6            3%

·         Personal Property Tax                       1.5            3%

·         Everything else                                1.8            3%

Grand Total                                            $53.1       

A quick summary:

• Real Estate Property taxes are about 20%;
• HOST sales tax and franchise fees total about 30%;
• Various business taxes are another 28%;
• Everything else is 22%.

Almost all of that money is being collected without the creation of Briarcliff; but is going somewhere else.

Just to clarify what this money is, and where it comes from (almost none of it is “new”).

Approximately $6.5 million is “enterprise fund” revenue. This is money collected for specific purposes, and is spent for those purposes. They really aren’t part of the County’s operating funds now, and wouldn’t be broadly usable by the city. These items include street light charges, restricted hotel/motel taxes and development funds.

Approximately $8.1 million is from franchise fees, which are now being split among other cities in Georgia – Macon, Dalton and Columbus, among others. That money (which we’re paying now) would simply come to us in DeKalb County rather than all over the state.

Approximately $8.1 million is from the HOST 1% sales tax (20% is split among cities; the other 80% goes to the County). Those funds are now being split among existing cities in DeKalb County. So we would get our tax money that is currently going to Dunwoody, Brookhaven and Lithonia.

About $0.9 million of the Community Development Block Grant funds come from the federal government. You’re paying for that too; you’re just not getting it.

That leaves about $29.5 million that changes from DeKalb County government to the City of Briarcliff, to pay for the services that the city would take over from the County – Police, Road maintenance, Park management, Zoning and Permitting. That amount makes up about 5% of the County budget of 2012, which is the year used by CVI in their analysis.