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Thought Leadership Views From Peachtree

Buckhead City Proponents Mislead Citizens about the Financial Impact on Atlanta

By Peter Aman, former Bain & Company Partner and former City of Atlanta Chief Operating Officer

There is a lot of conflicting information circulating about the financial impact of Buckhead leaving the City of Atlanta. For this column I invited Peter Aman to respond on behalf of the Committee for a United Atlanta to claims being made by the Buckhead City Committee. – Jim Durrett, President of the Buckhead Coalition and Executive Director of the Buckhead CID

The advocates for the Buckhead City movement are dismissive of those pointing out the destructive financial consequences of a Buckhead divorce from Atlanta. The Buckhead City website makes a point that the $203 million in revenues derived for Buckhead City in a feasibility study done by Valdosta State University are only 10% of the City of Atlanta’s fiscal year 2022 budget of $2.04 billion. No big deal, right? Wrong. The problem is that the budget number cited by the Buckhead City proponents is either intentionally misleading or they just don’t understand how Atlanta’s budget works.

The $2.04 billion cited by the Buckhead City proponents includes roughly $1.3 billion in dedicated funds associated with Hartsfield-Jackson International Airport, Atlanta Watershed Management and others. Those funds may not be co-mingled and used in the general operations of the City. The General Fund, with a fiscal year 2022 budget of $710 million, is the fund out of which the City pays police officers and fire fighters and conducts the general business of the City. That General Fund budget is what the City Council approved in June. In fact, the revenue line items contained in the General Fund budget were used by Valdosta State to compute its revenue estimates for a proposed Buckhead City.

So, the appropriate way to analyze the impact on Atlanta is to look at the revenues Buckhead City would siphon off as a percentage of Atlanta’s General Fund. Using the Valdosta State estimate of $203 million and the City’s fiscal year 2022 General Fund budget of $710 million results in a 29 percent reduction in revenues for the City of Atlanta. The City has never had to deal with a revenue reduction of that magnitude since the Great Depression and it would cripple the City.

The good people at Valdosta State would no doubt understand this, but they were not asked to look at the impact of a proposed Buckhead City on the rest of Atlanta. They were only tasked with assessing whether Buckhead City would have enough revenues to operate. And, of course, if you’re only looking at whether the wealthiest neighborhoods in Atlanta can support themselves, the answer is going to be yes.

But a Buckhead divorce would impact Atlanta in profound ways and we need to have an honest debate about that. This is why KB Advisory Group was engaged to prepare an analysis of what a Buckhead de-annexation would mean for the rest of Atlanta. In KB Advisory Group’s report, even after cost reductions undertaken by no longer providing services in Buckhead, Atlanta would stand to have a net loss in its General Fund budget of $80 to $116 million annually. The Atlanta neighborhoods that are not in Buckhead City would bear the brunt of the loss. And if the rest of Atlanta is substantially less able to pay for public safety officers and other city services, Buckhead won’t be safer, and the Atlanta region won’t continue to thrive as a place that attracts businesses from all over the world.

The Buckhead cityhood movement stems from real concerns about crime, the level of city services and the unresponsiveness to the issues that affect Buckhead and the rest of the City. We should all press the incoming Mayor and City Council to work urgently to address these issues, not just for Buckhead, but for all communities within the City of Atlanta, and I encourage all Atlantans to make your voices heard and vote on November 2nd.

But in the meantime, when you hear anyone suggest that Buckhead leaving Atlanta wouldn’t have devastating financial consequences, know that this claim is nothing but wishful thinking.

 

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