City budget crisis means painful choices

If you thought the recent General Assembly was a rancorous affair, with state leaders calling each other names and important bills dying on the vine, then you may want to stay buckled in for the next few weeks. Over at Atlanta City Hall, it’s likely to be a bumpy ride.

Mayor Shirley Franklin kicked off this past Monday morning with a hastily called press conference whose purported subject was next year’s budget crunch. But instead of providing details about how her administration plans to address a predicted $140 million shortfall, Franklin talked at length about her achievements in reforming city operations over the past six years, giving the event the feel of an exercise in image management.

As for the budget for the 2009 fiscal year, which begins July 1, Franklin said she planned to deliver “an aggressive proposal to the council” on her deadline of May 1. The council’s subsequent decisions, she explained, “will guide the city for a long, long time.”

As Franklin delivered the news, Councilwoman Anne Fauver – who, like most of the council, was in attendance, muttered, “Crap!”

Afterward, Fauver voiced a concern shared by several of her colleagues: that Franklin will deliver a budget proposal that calls for mass layoffs of city workers, brutal cuts to popular city services and, worst of all, a property tax increase – in essence, a poison pill the council must find a way to swallow.

“I’ve already been told by several members of the administration that if we don’t approve a tax increase, we’ll be irresponsible,” said Fauver, who is convinced that the mayor plans to ask the council to raise taxes.

Franklin seemed to hint as much Monday when she compared the city’s current budget crisis to the one she faced when she arrived in office in 2002 and found that outgoing Mayor Bill Campbell had left the city with an $80 million deficit. To balance the books at that time, Franklin slashed staff, temporarily trimmed programs and persuaded the council to pass a large tax increase.

“I’m not shy about telling people what it costs to run government,” she said.

But Councilman Howard Shook, who chairs the Council Finance Committee, says the circumstances, then and now, are different.

“The last budget mess we had to face was left behind by a guy everybody loved to hate,” he says, noting that Campbell is now serving time in a federal pen. “This crisis is occurring under someone who everyone expected better from. I, for one, will not be able to support a tax increase.”

Councilwoman Clair Muller fears a return to the atmosphere of spring 2004, a time when the council was at war with itself over a program to fix Atlanta’s crumbling sewer system. Members were at each other’s throats over how much to raise sewer rates, whether seniors should be exempt from the rate hike and other details.

Whatever the May 1 proposal looks like, all options are likely to be unpleasant. The result could be a return to acrimony as elected officials debate the merits of staff cuts over tax increases.

“If the Franklin administration hands us a budget that we have to wrangle over, then we’ll end up being the bad guys,” Muller says.

Department heads have been asked to prepare budget proposals that reflect a 25 percent reduction in funding, leading some observers to wonder if the mayor will opt for across-the-board cuts – with the exception of police, fire and courts. But insiders say officials have also been asked to prepare more extreme scenarios – suggesting that some departments will get whacked worse than others. And a few council members even suggest that the public-safety bureaucracy should not be immune from strategic cuts.

The administration is expected to get a jump on staff cuts this week by announcing layoffs of several hundred city workers as part of a last-ditch effort to avoid rounding out the current fiscal year in the red. The 2008 budget, which ends June 30, has a projected $60 million shortfall – an amount that would need to be added to next year’s $140 million deficit if it isn’t erased now.

But, although about 70 percent of the city budget goes to personnel, layoffs alone won’t be enough to balance next year’s budget, Shook says. The mayor will also need to look at cutting city services and programs, he says.

“Everyone’s been real tight-lipped about the draft budget, but when you’re cutting a budget to the extent that we must, cities traditionally look to the parks department and I expect it will be no different here,” Shook says.

Not to suggest these will be easy choices. Earlier this year, when the parks department announced it would shut down public pools for the summer to conserve water, the citywide outcry from parents forced a quick about-face. With pool closings apparently off the table, the ax could fall on local recreation and arts centers in the form of shorter hours, less staff, fewer programs or outright shuttering. One city official predicts that the department could decide to save money by quietly closing some centers “for renovations.”

It’s almost certain Atlantans will see higher grass and more weeds on city property this summer as the city sends out fewer mowing crews.

Although council members complain they have few details about the forthcoming budget proposal, some of the tidbits they have been given have already sparked controversy.

Councilwoman Mary Norwood, who’s running for mayor next year, says she intends to fight the administration’s plan to base layoff decisions on job performance. A better guideline, she says, is job function; in other words, is the position necessary?

With council President Lisa Borders and Councilman Ceasar Mitchell also running for mayor next year, politics are certain to play a sizable role in the upcoming budget process, another factor that will add to the turbulence in the next few weeks.

The council must approve the budget by mid-July or risk a city shutdown.