A Review of Per Capita County Taxes and Spending in 10-County ARC-Metro Atlanta Region

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1 A Review of Per Capita County Taxes and Spending in 10-County ARC-Metro Atlanta Region Written By: Jerry W. Cooper, County Manager June 21, 2011

2 Abstract: June 2011 Which Metro-Atlanta Counties has the Highest Taxes and Spend the Most of Your Tax Dollars? Review of Per Capita County Taxes and Spending in 10-County ARC-Metro Region Jerry W. Cooper A This report is based on preliminary research presented to the Cherokee County Board of Commissioners at the June 21, 2011 Work Session Meeting. Based on Governmental Fund Taxes as published in Comprehensive Annual Financial Reports (CAFR), Cherokee County has the second lowest tax burden per capita of 11 counties in the ARC-Metro Atlanta Region while Fulton County has the highest. Cherokee County spending changed 41.39% during the past decade, while population and inflation changed 82.3%.

3 Millage Rate RESEARCH REPORT Which Metro-Atlanta Counties has the Highest Taxes and Spend the Most of Your Tax Dollars? A Review of Per Capita County Taxes and Spending in 10-County ARC-Metro Atlanta Region Introduction As part of an ongoing review of taxes and spending in local government, this report provides information comparing county taxes and spending per capita in the 10-County ARC-Metro Atlanta Region, as well as Forsyth County. My interest in county taxes and spending was prompted by an examination of variances in property tax rates among the 10-County ARC-Metro Atlanta Region, including Forsyth County, to ensure that we were honoring our commitment to the taxpayers as stated in the County Mission Statement, to provide fiscal responsibility and conservative planning to maintain lowest tax rates in ARC Metro Atlanta Region 1. The average total property tax rate for the Region in 2010 was mills but it ranged from a low of to a high of a variance of 68%. The results of the tax rate analysis made me wonder if similar variances existed in county taxes (tax burden) and spending. Refer to Appendix A and B for detailed analysis. The purpose of this study is to provide taxpayers, Board of Commission, other elected officials and staff, with a baseline regarding taxes and government spending for further analysis. Taxes Cherokee County has the lowest general fund millage rate in the State of Georgia at mills moving up from 4 th lowest in 2007, and ranks second lowest in the ARC Metro Atlanta region in total property tax rates 2 and 29 th state-wide. Forsyth County has the lowest property tax rate in the region but has an additional 1% sales tax, which Cherokee does not have ARC - Metro Atlanta Region Property Tax Rates The Atlanta Regional Commission (ARC) is the regional planning and intergovernmental coordination agency for the 10-county area including Cherokee, Clayton, Cobb, DeKalb, Douglas, Fayette, Fulton, Gwinnett, Henry and Rockdale counties 2 Total property tax rates include: General M&O, Fire District, Special Districts, County Bonds, School District M&O and School Bond

4 When determining if Cherokee County is maintaining the lowest tax rates in the Region, sales tax rates must also be considered. In the ARC Metro Atlanta Region, Cherokee, Cobb and Gwinnett counties are the only counties that do not impose a Local Option Sales Tax (LOST). Fayette County has a LOST but does not impose a Special Purpose Local Option Sales Tax (SPLOST). RANK (1=Lowest) GENERAL M&O TAX FIRE DISTRICT TAX OTHER DISTRICT RATES SCHOOL DISTRICT M&O TAX SCHOOL DISTRICT BOND TAX SALES TAX RATE BOND INCORP COUNTY RATES TOTALS RATE 1 FORSYTH CHEROKEE COBB FAYETTE GWINNETT DOUGLAS CLAYTON HENRY ROCKDALE DEKALB FULTON AVERAGE It is impossible to say how much the local tax burden is based solely on property and sales tax rates, but taxes paid to local government is a common measurement of tax burden. Based on governmental fund 3 tax revenue received in Cherokee County, the tax burden increased 9.81% or less than 1% annually from 2000 to 2010 from $ per person to $ per person. During this same period, per capita income 4 in Cherokee County grew 38.3% or 3.83% annually - from $24,871 to $34,388. Cherokee County s per capita tax burden of $ is the 2 nd lowest in the ARC Metro Atlanta Region. Douglas County 5 has the lowest per capita tax burden of $ in 2009, while Fulton County has the highest per capita tax burden totaling $ County 2010 Census County Population Total Governmental Fund Taxes Received Per Capita Taxes Variance 2010 County Property Tax Rate 2010 County Sales Tax Rate Ranking 1 = lowest taxes/capita Douglas 132,403 57,329,291 $ Cherokee 214,346 95,491,191 $ % Fayette 106,567 62,166,769 $ % DeKalb 691, ,475,000 $ % Cobb 688, ,633,188 $ % Henry 203, ,223,623 $ % Gwinnett 805, ,608,000 $ % Forsyth 175, ,381,328 $ % Rockdale 85,215 58,943,523 $ % Clayton 259, ,719,255 $ % Fulton 920, ,601,000 $ % Government Funds is defined as funds generally used to account for tax supported activity (i.e., general operations, public safety, courts, community development, parks, etc.), and includes General Fund, Fire District Fund, Park Bond, Insurance Premium Tax Fund, and SPLOST. Taxes used to pay for said services include General and Fire M&O property taxes, Park Bond property taxes, Insurance Premium Taxes and Sales Taxes (SPLOST) 4 Total personal income (including wages, dividends, interest, rent, and government payments) divided by the total population. Data source: Bureau of Economic Analysis. 5 Douglas county residents approved a 1% SPLOST effective January, It is estimated that tax revenue generated from the new 1% sales tax will total over $21 million annually, which will increase the tax burden on residents from $ to $595.38

5 County Spending During the past decade, government spending in Cherokee increased from $ per capita to $ per capita an increase of 41.39% or 4.14% annually. During this same period, the rate of inflation change totaled 31.2% 6 or 3.1% annually, while the population growth in Cherokee County changed 51.1% or 5.1% annually resulting in a total change of 82.3% or 8.2% annually. Cherokee County s per capita spending of $ is the 2 nd lowest in the ARC Metro Atlanta Region. Fayette County has the lowest per capita spending of $646.30, while Rockdale County has the highest per capita spending totaling $1, County 2010 Census County Population Total Governmental Fund Expenditures Per Capita Expenditures Variance (%) Variance ($) Ranking 1 = lowest expenditures/ capita Fayette 106,567 68,873,942 $ Cherokee 214, ,142,370 $ % $ Douglas 132,403 88,604,051 $ % $ Cobb 688, ,048,544 $ % $ Henry 203, ,918,994 $ % $ Gwinnett 805, ,178,000 $ % $ Fulton 920, ,976,000 $ % $ Clayton 259, ,445,854 $ % $ Forsyth 175, ,731,146 $ % $ DeKalb 691, ,147,000 $ % $ Rockdale 85,215 89,014,595 $1, % $ In order to compare spending (costs) across the 10-county ARC-Metro Atlanta Region, and Forsyth County, I used actual spending for tax supported operations 7 based on information provided in the most recently published Comprehensive Annual Financial Report (CAFR) for each jurisdiction and calculated the per capita cost to provide governmental services using 2010 population estimates released by the US Census Bureau. Expenditures attributable to each county are subject to interpretation, as each jurisdiction may provide different levels of service. And while this study does not claim that County X provides better services than County Y, the variances between each county raises the question: Are savings available in areas of government that if implemented could maximize efficiency efforts? To answer this question, I asked agencies and departments in Cherokee County government to survey counties within the region and compare expenditures, personnel and other factors to assist in identifying where we may be able to improve efficiencies or at a minimum identify areas where further analysis is warranted. Refer to Appendix B for detailed survey data. The Cherokee County Animal Shelter per capita operating budget totals $4.64 per resident ranking 6 th highest out of 9 counties surveyed. Fulton County has the lowest per capita spending of $2.28, while Bartow County has the highest per capita spending totaling $8.28. The survey results revealed that the Cherokee County Animal Shelter only utilizes 1 inmate to supplement labor costs, but both Cobb and Gwinnett utilize 5 inmates. Opportunity: Eliminate a position and utilize 2 inmates rather than 1 inmate to reduce cost with little or no impact on the level of service. Another example worthy of additional analysis is the Cherokee County Planning & Zoning Department. Cherokee s per capita operating budget totals $3.33 per capita. Clayton County has the lowest costs per capita Governmental Funds (General Operations, Law Enforcement, Judicial Services, Fire & Emergency Services, Development Services, Road Maintenance)

6 of $2.28 while Henry County has the highest cost per capita totaling $9.10. The Planning & Zoning Department has two (2) recent vacancies with a total annual cost of over $90,000. Opportunity: Eliminate the two (2) positions to reduce the operating budget per capita from $3.33 to $2.76. Below, is a ranking of Cherokee County agencies/departments based on spending per capita: Agency/ Department Operating Budget Operating Budget Per Capita Ranking 1= Lowest Costs Number Employees Employees Per Capita (10,000) Ranking 1= Lowest No. Animal Shelter $ 994,978 $ out of out of 9 Parks & Recreation $ 2,830,824 $ out of out of 10 Transportation* $ 3,050,206 $ out of out of 7 E9-1-1 $ 4,270,843 $ out of out of 7 Finance/Procurement $ 763,084 $ out of out of 7 Fire & Emergency Services $ 19,472,611 $ out of out of 6 Fleet Services $ 1,421,527 $ out of out of 7 Human Resources $ 260,000 $ out of out of 7 Information Technology $ 1,507,161 $ out of out of 7 Planning $ 524,093 $ out of out of 9 Building Inspections $ 585,068 $ out of out of 8 Property Maintenance $ 1,082,111 $ out of out of 7 Senior Services $ 1,184,936 $ out of out of 6 Clerk of Court $ 2,512,429 $ out of 16 State Court $ 666,198 $ out of out of 6 Probate Court $ 569,439 $ out of out of 6 Sheriff's Office $ 26,797,414 $ out of out of 14 Solicitor General $ 1,414,036 $ out of out of 9 Tax Commissioner $ 1,634,361 $ out of out of 7 While cost is a common measurement that lends itself to benchmarking, the number of county employees per capita also provides evidence as to whether a county is efficient. Cherokee County has the lowest number of employees per capita totaling 5.65 per 1,000 residents, while DeKalb County has the highest number of employees per capita of

7 Employees Per Capita (Number Employees Per 1,000 Population) Cherokee Gwinnett Fulton Forsyth Cobb Fayette Douglas Clayton Henry Rockdale DeKalb Conclusions Cherokee County has the lowest general fund millage rate in the State of Georgia at mills moving up from 4 th lowest in 2007, and ranks second lowest in the ARC Metro Atlanta region in total property tax rates 8 and 29 th state-wide. Forsyth County has the lowest property tax rate in the region but has an additional 1% sales tax, which Cherokee does not have. Based on governmental fund 9 tax revenue received in Cherokee County, the tax burden increased 9.81% or less than 1% annually from 2000 to 2010 from $ per person to $ per person. During this same period, per capita income 10 in Cherokee County grew 38.3% or 3.83% annually - from $24,871 to $34,388. Cherokee County s per capita tax burden of $ is the 2 nd lowest in the ARC Metro Atlanta Region. Douglas County 11 has the lowest per capita tax burden of $ in 2009, while Fulton County has the highest per capita tax burden totaling $ During the past decade, government spending in Cherokee increased from $ per capita to $ per capita an increase of 41.39% or 4.14% annually. During this same period, the rate of inflation change totaled 31.2% 12 or 3.1% annually, while the population growth in Cherokee County changed 51.1% or 5.1% annually resulting in a total change of 82.3% or 8.2% annually. Cherokee County s per capita spending of $ is the 2 nd lowest in the ARC Metro Atlanta Region. Fayette County has the lowest per capita spending of $646.30, while Rockdale County has the highest per capita spending totaling $1, Cherokee County has the lowest number of employees per capita totaling 5.65 per 1,000 residents, while DeKalb County has the highest number of employees per capita of Total property tax rates include: General M&O, Fire District, Special Districts, County Bonds, School District M&O and School Bond 9 Government Funds is defined as funds generally used to account for tax supported activity (i.e., general operations, public safety, courts, community development, parks, etc.), and includes General Fund, Fire District Fund, Park Bond, Insurance Premium Tax Fund, and SPLOST. Taxes used to pay for said services include General and Fire M&O property taxes, Park Bond property taxes, Insurance Premium Taxes and Sales Taxes (SPLOST) 10 Total personal income (including wages, dividends, interest, rent, and government payments) divided by the total population. Data source: Bureau of Economic Analysis. 11 Douglas county residents approved a 1% SPLOST effective January, It is estimated that tax revenue generated from the new 1% sales tax will total over $21 million annually, which will increase the tax burden on residents from $ to $

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