Hangover

"The city hasn't been entirely reliable in the past," he says.

Every year, Morris says, the council's Finance/Executive Committee makes changes to make the numbers in Mayor Bill Campbell's budget work, and every year "the full council trots out and [approves] the original budget."

Morris' comments get to what Campbell's detractors have complained about for some time. His budgets are of the rob-Peter-to-pay-Paul variety, and there is rampant waste in Atlanta government that hasn't been addressed.

David Sjoquist, the director of the Fiscal Research Program at Georgia State University points out that all these problems have occurred during the unprecedented prosperity of the late 1990s -- while the city has been growing for the first time in 30 years.

"There's no underlying structural reason why the budget is in the condition it's in," he says. "They've been giving raises and at the same time cutting property tax rates. That's a fundamental problem."

Franklin says it's worrisome to discover that during what has been an economic boom time, for the city and the country, there is a budget shortfall that isn't uncovered until the end of the year.

"Common sense tells you there's reason for concern" about the city's financial situation, she says.

Corbin himself suggests there's plenty of fact behind the argument that the city government is wasting money. He says a performance audit recently was completed on the Bureau of Motor Transport. That's the department accused by Pitts as being the administration's junk pile for unqualified but politically connected employees. Corbin says the changes the audit suggests in Motor Transport could save Atlanta $14 million over the next four years. Some of those changes have been made, Corbin says, but the question is whether all the changes will be made if well-connected people have to lose their jobs.

Overall, Atlanta employs some 8,000 people. Similarly sized cities such as Miami -- about 3,300 employees -- and Sacramento, Calif. -- about 5,000 employees -- get by on far fewer. Atlanta during the Massell administration from 1968-72 employed around 3,000 people, and that's when the city's population topped half a million.

Both Pitts and Gloria Bromell-Tinubu, the third candidate for mayor, talked about reducing the City Hall workforce, claiming there are millions to be saved by cutting the fat. Franklin never made any commitments about job cuts. She might have a difficult time pushing for them, because city employees provided a firm base of support for her during her campaign.

REMEDIES
Forty-five million dollars represents about a tenth of the city's annual operational budget. If Franklin doesn't want to abandon the idea of reserves, destroy the city's healthy bond rating and run a deficit -- as the city is doing this year -- she can take a number of immediate steps to fix the budget.

Like Corbin says, the city needs to either cut costs or increase revenues by 10 percent. The most obvious way to jack up revenue is to raise property taxes. For years, the city has been rolling back the millage rate, effectively reducing property taxes. Corbin estimates the city could bring in an additional $9 million this year if the rate were to simply remain the same. That's because the assessed value of property in Atlanta is rising.

The problem with leaving the millage rate the same is that it will effectively increase property taxes, which has to be publicized, and Atlanta residents won't like it. The city faces a tougher fight to actually raise the millage rate. Any tax increases could exacerbate gentrification -- as wealthy new residents move into old Atlanta neighborhoods and fix up houses, property values and taxes for long-time residents soar -- though one local expert says it shouldn't worsen the problem too much. Also, with the increased unemployment that comes with a recession, it will be harder for the city to collect taxes, Sjoquist says.

A second alternative is to aggressively pursue uncollected taxes and fees. Pitts says there's millions in uncollected sanitation fees alone. The next mayor and City Council need to go after these bills, Morris says, to get "tough on the deadbeats." If residents don't pay, slap a lien on their property.

Again, though, there must be the will to be so aggressive. When the finance office sent out letters -- just letters -- threatening liens earlier this year, council members and community groups were outraged, Morris says.

"They said, 'Don't say things like that to these poor people,'" Morris recalls.

As Morris' comment illustrates, Franklin may need more political will to cut costs than to raise taxes. Streamlining should be an easy way to save a million here or a million there, but generating real savings is going to mean layoffs or program cutbacks.

WHAT WILL SHE DO?
Franklin promises to audit upon entering office. That was a safe thing to say during the election. Nobody gets angry about audits. It doesn't cost votes.

No one, not even Franklin, knows how she'll pay for the audits -- another bill for a fiscal house that's in anything but good order. She's suggested she'll seek donations to help fund them.

But the part of the audit plan that you can't disagree with is that it should mean that Franklin and the rest of Atlanta might finally know how much money the city actually has, where it comes from and where it goes -- questions for which Campbell's foes on City Council have for years said they can't get answered. As Franklin says, audits are the only way to figure out exactly what's happened to the city's finances.

"I don't wish to be in her shoes," Sjoquist says about the budget debacle Franklin faces. "You cannot in one year build up the reserve to where they were" and balance the budget without budget cuts or tax hikes.

And Corbin's plan is to build up the city's reserve -- as he calls it, its "trust fund" -- back to $31 million. It will be part of the budget. Cash reserves are important. They help protect bond ratings. Standard & Poor's currently gives Atlanta a double-A stable rating, which was an improved outlook the city achieved just six months ago. It's not the best bond rating -- AAA -- but it's solid, and Atlanta needs it to get favorable interest rates on government loans. The city will need loans to deal with its pending infrastructure projects, such as a multibillion-dollar sewer system fix.

Franklin must deal with the budget crisis decisively or risk bringing to a quick close the usual honeymoon between the mayor's office and the City Council. An impasse will endanger the city's future economic health. She might be able to find millions in savings, but it's unlikely waste reduction will be enough. She's going to face decisions that people won't like, nasty elixir for a malady that seems to get worse every day.

Remember, Atlanta is only a detail or two from becoming the new Miami.

kevin.griffis@creativeloafing.com