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COLUMBUS, Ga. — An apparent design flaw in the city’s budgetary planning process nearly cost residents millions in property tax savings.

The $7 million in tax savings were recently approved by city council during the June 27 meeting. Councilors voted unanimously to roll back the property tax millage rate after initially delaying their vote one week prior on June 20.

The reason for that delay appears to have been tied to the surprise increase in the tax digest, which council members were not made aware of until the absolute last minute, weeks after they had already held committee meetings deliberating the budget.

It took weeks of active civic engagement from local residents through three public hearings to ultimately arrive at the reduction in property taxes. 

So what does that mean?

It means city councilors are highly incentivized to never lower the millage rate, as doing so would force them to rework the city’s budget; work they’d already done weeks before. Since lowering the millage rate means less income for the city, the budget would have to be  reworked  to match the now-lowered income from property taxes. 

Without city councilors’ last-minute intervention at the June 27 meeting in response to public outcry on the subject, residents would have found themselves owing $7 million more in property taxes this year alone. 

This appears to be a major design flaw of the city’s budgetary planning process. 

Here’s a look at the entire process from end to end.

CCG BUDGET PROCESS

The following graphic produced by CCG shows an overview of the budget planning process. Note how the property tax millage rate isn’t involved in the conversation until June — which is a full month after City Council makes their decisions on what to add or delete from the budget.

Here’s a more detailed breakdown of what that process includes. 

Note: The following processes for budgetary planning and adoption were published on pages 27-28 of the Columbus Consolidated Government Fiscal Year 2024 Recommended Operating Budget. Should the reader choose to explore the document linked above, it is important to understand that it is the city’s originally-proposed budget and does not reflect updated figures approved by Council throughout the budget process; it is not the final adopted budget for FY2024.

Budget Preparation

The Columbus Consolidated Government (CCG) operates under a fiscal year that begins July 1 and ends June 30. The major steps in the process are outlined below:

Budget Adoption

1. Beginning in November, Financial Planning prepares the budget database and reports showing prior years’ actual expenditures and revenues and compares those to their budgeted targets. Any anomalies are reviewed and adjusted for the upcoming budget year. Upcoming and long-range challenges and opportunities are evaluated. Operating trends, as well as, economic indicators are taken into consideration when preparing estimates for budgeted revenues and expenditures. Expected changes in pay plan, benefits, gas, water, electricity, motor fuel, capital items, etc., are also considered. This database is used as the financial framework for budget preparation.
2. Beginning in January, departments are asked to evaluate and update their goals and objectives, and their relevant performance indicators, for the coming fiscal year. Any major changes in operations are considered and shared with Financial Planning to ensure that the new budget reflects those operational changes as appropriate.
3. Between January and March, Financial Planning prepares a draft of the Operating Budget for the Mayor’s consideration. During this time, the Mayor and City Manager review departmental operations and consider any new budget requests in order to propose a recommended balanced budget. Financial Planning prepares the final Recommended Budget plan for the Mayor’s approval and presentation to Council.
4. No fewer than sixty (60) days prior to the fiscal year commencing July 1, the Mayor submits to Council a proposed operating budget for all operating funds. The Operating Budget includes recommended expenditures and the means of financing them.
5. A series of workshops and public hearings are held before making final changes to the Mayor’s recommended budget.
6. The Annual Budget is formally adopted by Council before July 1.

Expenditure Control

Once the Annual Budget has been adopted, expenditure control is maintained on the appropriation unit basis (group of accounts) with capital expenditures maintained under full control. Throughout the year, all expenditures and revenues are monitored.

Budget Control

Georgia Law, O.C.G.A. 36-81-3 establishes the legal level of budgetary control as the department. Within the overall budget limitations, authority is delegated to the City Manager. When acting on the authority delegated by the City Manager to the Finance Director, it is recommended that intra‐departmental transfers of appropriation and revenue anticipation may be approved as deemed necessary. Under no circumstances, however, may the total budget of any department be increased or decreased without Council approval.

 Budget Amendments

Amendments affecting the bottom line of any department are approved solely by Council. Section 7- 404 of the City Charter describes the authority:

“The Council may make appropriations [revenue and expense] in addition to those contained in the current operating or capital budgets at any regular or special meeting called for such purposes.”

THE BOTTOM LINE

It seems pretty ridiculous and incredibly inefficient to force City Council to make a decision on whether or not they want to lower the property tax rate after they’ve already worked for weeks to balance the darn budget. 

Seems a bit extortionary, wouldn’t you say?

Perhaps city councilors should explore how this process might be improved, as Section 7-401 of the City Charter grants them the power to dictate the process in its entirety:

“The Council shall prescribe by ordinance the procedures and requirements for the preparation, adoption and execution of an annual operating budget, a capital improvement program and a capital budget. Such ordinance shall require the use of program budgeting by the consolidated government.”

We have a feeling that the problem described in this article isn’t the only one we’ll all be hearing about soon. 

Stay tuned. 

Facts are stubborn things — and we’ll keep publishing them, whether city officials like them or not.

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