In Thursday’s editorial, “Egyptian worth the investment,” the Daily Chronicle’s editorial board asserted that an improved Egyptian Theatre would be a plus for downtown. I agree.
However, something’s been missed in the analysis: a peek into our collective wallet.
For the past three cycles, I have argued for a survival budget for several reasons, not the least of which is concern over DeKalb’s dependence on state funds. Recently, state government threatened to short us close to $3 million in income-tax sharing.
We need a contingency plan, but instead everybody’s talking about spending more Tax Increment Financing funds as if such a disaster can’t happen. Please, walk into any randomly selected local social service agency and ask.
Another developing budget buster is plummeting Equalized Assessed Valuation. Since 2008, the city has lost $54.3 million in total EAV, $37.5 million of which is TIF base EAV. This translates to a loss of about $16 million in collective TIF increments for the same time period, and we have a lot of TIF debt left to pay.
(Incredibly, DeKalb officials don’t yet seem to understand that EAV fell significantly again last year. The budget draft for Fiscal Year 2012 still claims a total city property tax rate of .65, but actually it was raised to .6899 to meet this year’s levy request.)
There’s other bad budget news, such as deep deficits in certain funds and the inability to protect ourselves from catastrophic liability, but I’m dealing with a word limit here. Suffice to say, we’re watching a slow-motion train wreck while Re:New DeKalb plans to plant a shiny new depot in the center of the devastation. It’s surreal.
What can we do? We can create a survival budget that includes adaptations in how we use TIF. The sum being considered for the Egyptian cannot be used to pay down debt, but this does not mean it must be spent. There is a mechanism in TIF for declaring a surplus of increment at the end of each fiscal year, which would help us – and the other local taxing bodies – continue to meet obligations during the slide.
I ask the council to budget with an eye to the largest surplus possible by cutting back on TIF and other optional projects to conserve every dollar we can. In our situation, it’s the responsible response.