) (1/ '--' ...- ... nue Sharcal. Gover Georgia Department of Communit Georgia Local Government Finances, 1984: An Overview plus a special report Revenue Sharing and Georgia Local Government Finance Georgia Department of Community Affairs Jim Higdon, Commissioner Government Information Division 40 Marietta Street Atlanta, Georgia 30303 July, 1985 An Equal Employment Opportunity Employer Received FEB 06 1986 DOC UMENTS ,UGA LIBRAR IES GEORGIA LOCAL GOVERNMENT FINANCE PROGRAM - PROJECT STAFF - Project Coordination, Research and Analysis, Reporting, Data Base Management Department of Commun ity Affa irs, Government Information Division Lynn Thornton, Assistant Commissioner David Wiltsee, Chief of Research and Information Paul W. Lycett, Senior Analyst/Computer Applications Specialist Data Collection and Local Government Coordination Department of Commun ity Affa irs, Techn ical Assistance Division Ken Cook , Assistant Comm issioner Tim Grogg, Assistant Division Director Bill Huffmaster, Consultant Computer Programming and Data Processing University of Georg ia, Carl Vinson Institute of Government Dr. Joseph Whorton, Director of Research Bob Sellers Jim Feldt Barbie Kiker I V; ACKNOWLEDGEMENTS The Department of Community Affa irs gratefu lly acknow ledges the cooperation of city and county officials in return ing the survey forms from which the data in these reports were derived. The Department also expresses its appreciation to the following organi zations and agenc ies, which contributed to the report design , or to the collection , analysis, and processing of the financ ial data: Area Planning and Development Commissions Association County Commissioners of Georgia Bureau of the Census, U.S. Department of Commerce Carl Vinson Institute of Government, University of Georgia Georgia Department of Aud its Georgia Department of Education Georgia Department of Human Resources Georgia Department of Revenue Georgia Municipal Association Georgia Society of Certified Public Accountants Office of Revenue Sharing , U.S. Department of Treasury TABLE OF CONTENTS Page Georgia Local Government Finances , 1984: An Overview 1 Finance '84 .2 Reader's Guide to Georgia Local Government Finances, 1984: An Overview . ... ... .... ...... . .... . 4 Highlights 5 Municipal Government Finances 8 County Government Finances . . . . . . . . . . . . . . . . . . . . . . .. 25 Revenue Sharing and Georg ia Local Government Finance 41 Note on Data Sources 42 Reader's Guide to Revenue Sharing and Georgia Local Government Finance 43 What is "Revenue Sharing"? 44 Highlights 45 The Big Picture 46 County Finances and Revenue Sharing 50 Mun icipal Finances and Revenue Sharing 58 Append ix A - Data Categories 66 Appendix B - Local Government Financ ial Data: FY 83-84 70 Append ix C - Municipalities included in Survey Results 72 Append ix 0 - Counties incl uded in Survey Results 75 Appendix E - Revenue Sharing Allocations to Georg ia's Local Governments, Entitlement Period 15 . . . . 76 Georgia Local Government Finances, 1984: An Overview Finance '84 Nothing stirs up a hornet's nest more than taxes ... or how to spend money ... or whether to borrow. As every official who ever served in local government can attest, money means controversy. While Georgia Local Government Finances, 1984: An Overview cannot make city and county finances less controversial , it can help state and local leaders better understand and cope with their fiscal issues. As late as 1979 Georgia was one of just three states with no laws requiring cities and counties to conduct audits or prepare financial reports. In 1980, the Georgia General Assembly enacted the Local Government Financial Management Standards Act (Act 1405, Georgia Laws 1980, as amended) placing financial management requirements on localities and requiring the Department of Community Affairs to prepare an annual report on local government finances. This , the third annual report, was presented to the Governor, the Speaker of the House of Representatives, and the President of the Senate (Lieutenant Governor) by January 15,1985, in conformance with provisions of Act 1405. The information used to prepare Georgia Local Government Finances, 1984: An Overview was collected through a comprehensive survey of every city and county government in the state. Only general purpose local governments are surveyed, excluding such entities as school boards and most special districts or authorities. The survey is the product of a cooperative agreement between the State of Georgia and the U.S. Bureau of the Census . Survey results are provided to the Census Bureau for its nationwide reports on local government, and to the U.S. Department of the Treasury, Office of Revenue Sharing. Treasury uses the data to establish annual levels of Revenue Sharing funding to local governments during the following year. The survey obtained data for the most recent fiscal year, ending between July 1, 1983 and June 3D, 1984. Thus the data reported does not conform to a specific 12-month calendar period, as local governments have varying fiscal years. Survey responses are not audited responses, necessitating a degree of caution in the analysis and 2 interpretation of results. Also, local governments use different accounting systems. Consequently, certain data requested in the survey may not be obtainable from local accounts and records. This year, as in past years , the response of city and county officials to the su rvey of local finances was exceptional. All 159 county governments completed and returned their survey forms. (The Columbus-Muscogee consolidated government is classified as a city, however, in keeping with Census Bureau classifications). Of the 534 municipalities sent survey forms , 518 completed surveys and are included in th is analysis. Every city with a population over 1,000 is included . Since the original survey and report in 1982, a number of refinements have been made in the entire process of data collection, data processing , and reporting. At the suggestion of the Georgia Municipal Association, the finances of local government utility systems are distinguished from general purpose finances in this report. Expanded data on city and county debt provides a clearer picture of local borrowing than in the past. Georgia's 18 Area Planning and Development Commissions (APDCs) continue to assist their constituent local governments in completing and submitting survey forms. For data processing support, the Department of Community Affairs contracts with the Carl Vinson Institute of Government at the University of Georgia. Not only does this provide DCA data processing support at a reasonable cost , but the University system has access to a valuable information base for fiscal research. In July, 1984, the Department of Community Affairs published the 1984-85 Municipal and County Government Fiscal Planning Guide, available upon request. The Guide has comparative data useful for local budqetinq, however big or small the community. An improved Guide will be available in the summer of 1985. Upon request, local and state agencies are afforded access to the data base of local fiscal information maintained by the Department, allowing otherwise unpublished data to be made available. Data for individual jurisdictions is released only with certain restrictions, including notification of each local ity upon release of its data to other than government users. 3 Reader's Guide To Georgia Local Government Finances, 1984: An Overview Statistical reports usually make for ponderous reading. To make this report as useful as possible for people who don 't have time to wade through a thick report, each chapter can be read by itself without the support of the others. For a brief look at major aspects of finance, the Highlights chapter is best. Highlights shows the striking differences in revenue sources, expenditure patterns, and borrowing practices. It becomes clear that any particular state-level action concerning local finance is likely to affect cities and counties very differently. The two most in-depth chapters are Municipal Government Finances and County Govern- . ment Finances. Both chapters are structured the same. Major topics covered, in order, are: General Revenues Utility Revenues General Expenditures Utility Expenditures Debt Graphics in the two chapters show the who le "pie", such as general revenues, first. Then the slices of the pie are pulled out and examined in more detail - such as the intergovernmental revenues slice from general revenues, for example. For questions of what comprises a certain category (such as health and human services expenditures or service charge revenues), turn to Appendix A. The categories and sub-categories of data collected from local governments are listed. Money figures for counties, cit ies, and local governments combined appear in Appendix B. These figures are subject to some change in the future as survey data is further examined and ref ined. 4 Finally, Appendix C lists the municipalities and counties responding to this year's survey. Populations given with each locale are July 1,1982 estimates produced by the Census Bureau and used by the Treasury Department's Office of Revenue Sharing. Highlights This br ief chapter focuses on major features of Georgia local government finances, pointing out important trends and city/county contrasts. General Revenues * Georgia's local governments collected revenues of $3.3 billion in the most recent fiscal year . About 2/3 was general revenues , 1/3 utility revenues. * Property taxes remain the largest source of local government revenue at $800 million , up 9% from the previous year . Real and personal property taxes rose just 4%, however, to $640 million. * The property tax brings in almost half of county general revenue, but less than 1f.I of city general revenues . Municipal revenues are more evenly distributed among several major sources. * Local option sales taxes were being collected by 125 counties and 355 municipalities as of July 1, 1984. The local option tax contributed 10% of county and 13% of municipal general revenues. * Local option sales tax proceeds increased $66 million, 35% above the previous year. Although half of the increase was collected by Atlanta and Fulton County (exercising the local option for the first year) , smaller jurisdictions experienced incr eases totall ing $34 million . 5 * Federal funds to localiti es declined 11% ($31 million) from the previous year. State fu nds increased 18% ($37 million). Over th e past two years federal inter governm ental revenue s have dropped fro m $295 million to $250 millio n, whi le revenues fro m the state increased steadily fro m $197 million to $244 millio n. General Expenditures * Local government general (non-utility) expend itures topped $2 bill ion fo r the fiscal year . " Big tick et" items were pu blic safety ($51 5 million), health/human services ($300 mill ion) and streets/ highways ($260 million). * General expenditures rose almost 8%, or $1 50 mil lion during t he fiscal year. * Significant spending increases occurred in housing and com - munity development (up 23%from last year) and leisure services (up 13%). * Reported expend itures for courts decl ined $4 mi llion to $99 mill ion . Pub lic works dipped slightly ($1 mi llion , or less than 1%). All other expend iture categories increased over the prev ious year . Utilities * Water and sewer systems, the dominant local government ut ility, had reported revenues of $430 million and expenditures close to $385 million. Revenues increased 3% over last year; expenditu res were down about 3%. * Municipal water and sewer systems have twice the revenues and expenditures of county systems . * Electric and gas ut ilities, operated by some cities but practically no counties, can be significant net revenue producers. Elect ric system revenues of $300 mill ion topped expend itures by more than $40 million. Gas systems took in about $25 million more than they spent, with revenues of $235 mill ion . 6 * Electric systems increased revenues over last year by 31 % - but expenses soared 28%. Gas systems had similar experience: revenues up 21 %, expenditures up 17%. Debt * Local governments finished the fiscal year with unpaid debts totalling $2.4 billion , including $1 .8 billion in outstanding revenue bonds. * A total of $310 million in new bonds was issued in the year . Last year just $119 million was issued. Three-quarters of new debt is due to 1) water/sewer borrowing of $148 million and 2) Atlanta borrowing for Hartsfield Airport improvements, $85 million. * For co unties, short-term debt consti tu ted 60% of all debt issued. Short-term debt must be paid off with in the calendar year incurred. City short-term debt was just 8% of total new debt. * Water/sewer revenue bonds dominate local borrowing for both cities and counties. General obligation borrowing for jail construction and renovation appears to be increasing sign ifican tly , due in part to court-mandated improvements. 7 MUNICIPAL GOVERNMENT FINANCES Georgia's cities raised $1 .917 billion during the fiscal year from all revenue sources. Spend ing for all purposes other than debt service was $1.690 bllllon' Debt issued exceeded debt retired by $117 million, due mainly to large airport-related borrowing by the City of Atlanta ($85 million). Interest paid on all municipal debt was $95 million. FLOW OF MUNICIPAL FINANCES UTILITY 000000000 o0 tJ D GENERAL UTILITY Prior to any analysis of Georgia's municipal finances, it is important to acknowledge the dominance of the City of Atlanta. Of the 518 municipalities responding to the survey of local government finances and incl uded in this analysis, Atlanta accounts for 34% of total municipal general revenues, 29% of general expenditures, and 21% of utility revenues. For most items of both revenue and expenditure, Atlanta is in the range of 25% - 35% of all municipal activity. , The imbalance between general revenues and general expenditures is due , in large part , to an excess of revenues over expenditures of $105 mill ion . as reported by the City of At lanta. 8 MUNICIPAL REVENUES Municipal revenues consist of 1) general revenues and 2) utility revenues . The two are addressed separately because proceeds from utility operations, although a part of total municipal funds, are typically restricted to use within utility operations, and thus are unavailable for other purposes. During the fiscal year general revenues were $991 million , or 52% of total city funds , while utility proceeds were $943 million. MUNICIPAL REVENUES Other Revenues Property Taxes $257 MI'.:.:IIi;.:on~_r--_.:.$2=24 Million Sales, Excise, Special Use Taxes $287 Million Intergovernmental Revenues $223 Million General Revenues Municipal general revenues were derived from several leading sources, with no single dominant generator. General revenues accounted for 52% of total city revenues, down from 58% and 54% in the two previous years. The single largest source was sales, excise, and special use taxes, which raised $288 million. Property taxes ($224 million) and intergovernmental revenues ($223 million) were second and third among general revenues . A variety of other, smal ler sources accounted for $257 million. 9 A CLOSER LOOK AT SALES, EXCISE, SPECIAL USE TAXES Alcoholic Bever age $49 Million tn surence Premium s $32 Million Franchlle Payments $69 MIllion - 0.5'10 Ho tel/Molel $9 M il lion .1'10 Other M iscell aneou s Tues $1 MIllion Sales, excise, and special use taxes were derived from several sources. The local option sales tax raised $127 million of city revenues, or 6.6% of total municipal revenue (including utilities). Other significant sales, excise, and special use taxes were franchise payment taxes ($69 mill ion) , alcoholic beverage taxes ($49 million), and insurance premiums taxes ($32 million) . The hotel-motel tax , also a local option tax , netted just $9 mill ion . As a group, sales, excise, and special use taxes were up 21 % over the previous year. Leading gainers were local option sales taxes (up $39 million , 45%), A CLOSER LOOK AT PROPERTY TAXES Real & Personal Property $200 Million Mo tor Vehicle Taxe s 0.5'10-$10 Mil lion O.3ClJointang lble Taxe s 0.2'10 $5 Mill ion Oilier Property Tu es $3 M Illion Intergovernmental Revenues $223 Million 10 and franchise payment taxes (up $9 million, 15%). In July, 1983,342 municipalities were collecting local option sales taxes. By July, 1984, this number had risen to 355 (of 518 municipalities included in this report). The #2 source of municipal general revenue is the property tax, accounting for $224 million. The dominant property tax is the real and personal property tax ($200 million, 10% of city revenues) . Despite property tax rollbacks as local option sales taxes were implemented, property tax collections rose 12% ($20 million) during the year, following a 14% rise the previous year. Only local option sales tax proceeds rose more ($39 million) from 1983. Intergovernmental revenues contributed $223 million to city income (about 12% of total revenues) , up from $209 million in 1983. Federal funds comprise % of intergovernmental revenue for municipalities. However, federal revenue declined $10 million from 1983, while state funds to municipalities almost doubled from $25 to $48 million. Transfers from other local governments remained at about $10 million . From this information it would appear that Georgia's municipalities have begun to feel the drop in federal funds which hit county governments in 1983 and continued in 1984. The City of Atlanta accounted for 35% of all intergovernmental revenues (and A CLOSER LOOK AT INTERGOVERNMENTAL REVENUES Other Revenues Properly Taxes 5257 M illion'-----,r---~$<224 Million 0.5% " Local $10 Million 11 41 % offederal transfers) . All other cit ies combined suffered a drop of $8 million in federal funds (down 8%) while state funds increased by $17 million (up 79%). The largest reported federal categorical revenues accruing to municipalities were $56 mill ion from Community Development Block Grants and $43 million from Revenue Sharing funds. Water/ sewer grants were not specifically itemized, but are in the $40 million range. The biggest state funding source was Non -entitlement Community Development Block Grants at $13 million. Due to the balance among several revenue sources, a number of add itional sources contribute notably to municipal revenues. Use of money and property revenues (primarily interest earned on investment of city funds) accounted for $69 million (4% of total city income) . The importance of this source to most cities, however, is less than would appear - the City of Atlanta, alone, earned more than $38 million from use of money and property, 67% of total municipal revenues from this source. Service charges for other than utility services - mainly charges for garbage service - netted $87 million , the same as in 1983. Other general revenues were derived from licenses and permits ($56 mill ion), fines and forfeitures ($33 million) , and miscellaneous general revenues ($12 million) . A CLOSER LOOK AT SOME OTHER IMPORTANT MUNICIPAL REVENUES LIcenses, Permit., Feel Service Chorgeo $56 Million $87 Million Use of Money and Property <, $69 Million Fine s, Forfe itures , Fees $33 Million .6%- M iscellaneous Other Revenues $12 Million Intergovernmental Revenues 5223 Million 12 Change in Selected Municipal General Revenues: 1983 to 1984 Total General Revenues +$32 Mill ion +3.3% Revenue Source Amount Millions ($) Percent Local Option Sales Tax State Intergovernmental Franch ise Payment Tax Fines and Forfeitures Real & Personal Property Tax Licenses and Permits Alcoholic Beverage Taxes Insu rance Premiums Taxes Serv ice Charges (Non-Utility) Federal Intergovernmental Use of Money and Property +39 +45 23 92 9 15 6 22 4 2 4 8 2 4 2 5 -2 -2 - 10 -6 -37 -35 Utility Revenues Utilities include 1) water and sewer systems; 2) electric systems; 3) natural gas systems ; 4) airports; and , 5) transit systems. A CLOSER LOOK AT UTILITY REVENUES Publi c Transit $6 MIllion / 0.3% Gas 5235 Million 15.0% Wate r & Sewe r $290 Mill ion Intergovernmenta l Revenues $223 Million 13 Change In Municipal Utility Revenues: 1983 to 1984 Total Utility Revenues +$89 Million +10.6% Utility Amount Million ($) Electric +71 Airport 18 Gas 15 Public Transit 3 Water/Sewer -17 Percent +31 22 7 93 -6 Utilities are an important part of municipal operations in Georgia. Utility revenues accounted for a 48% share of total city revenues during the fiscal year, up from 42% in 1982. Revenues rose about 11 % ($89 million) from 1983. Electric revenues ($299 million) jumped ahead of water/sewer ($288 million) as the top municipal utility, thanks to a 31 % increase in reported revenues over 1983. Gas systems gleaned revenues of $235 million; airports, $98 million ($92 million from Atlanta's Hartsfield International) . The importance of electric, water/sewer, and gas utility revenues is further highlighted by this fact - revenues from each far outstripped the three top sources of municipal general revenue: real and personal property taxes, federal transfers, and local option sales taxes. The distribution of utility revenues among cities varies widely. Of 518 reporting cities, 415 had water/sewer revenues. However, just 80 operate gas systems, 50 electric distribution systems. MUNICIPAL EXPENDITURES Municipal expenditures consist of 1) general expenditures and 2) utility expenditures. Debt service - payment of both principal and interest on borrowed money - is addressed separately from expenditures under the heading of Municipal Debt. 14 MUNICIPAL EXPENDITURES Administration Courts $179 Million 0.3%-$5 Million Utilities $815 Million o Health 0.9 VO- $15 Million Public Works $168 Million 3.9% 3.9% -----Housing/ Community \ Development Leisure Services $66 Million $66 Million Expenditure levels for municipal general purposes and for utilities were similar. Genera l expenditures were $875 million (52% of total city spending) ; utility expenditures $815 million (48%). Total municipal expenditures were $1 .690 billion, up 5.5% over 1983 spending of $1 .601 billion. General Expenditures Municipal general expenditures for the year were $875 million. Public safety and corrections expenditures lead all municipal general expenditures. Included in public safety and corrections are police, fire, and jail spending . Spending for public safety and corrections was $271 million , about 16% of total city spending and 1/3 of general expenditures. General expenditures increased by 9.7% from 1983. Spend ing for municipal administration was $179 million , about 11% of total spend ing. Public works expenditures, at $168 million , 15 A CLOSER LOOK AT PUBLIC SAFETY AND CORRECTIONS EXPENDITURES Ot her 591 Million U tilities S185 Milhon Fire 590 Million 09 % Education / S1 4 Mllhon 3~% . 39 %<, Leisure Services Housmq/ Cornmunny Development S66 Million 566 Mllhon comprised mainly expenditures for garbage and trash collection and landfill operations. Leisure services and housing/community development spending were each $66 million. Leisure services consist of parks, recreation, and libraries. Leisure services spending increased 10% ($6 million) from 1983. Spending for housing and community development increased $8 million from 1983. The vast majority of municipal spending for housing and community development is funded through Community Development Block Grants. All additional general expenditures accounted for $191 million, or 11% of total city spending. Both health/human services and education (direct spending by municipalities, excluding school board expenditures) were $14 million. Courts expenditures were less than $5 million. Ninety million dollars were reported in an "other expenditure" category. Of this, $63 million was reported by the five largest cities (over 50,000 population) . The majority of expenditures reported as "other" are not of an unusual nature . Rather, accounting practices in some cities make it impossible to mesh local accounting practices with expenditure items on the finance survey . 16 Change in Selected Municipal General Expenditures: 1983 to 1984 Total General Expenditures +$78 Million +9.7% Expenditure Category Amount Millions ($) Percent Administration +24 +15 Streets and Drainage 10 14 Police Departments 9 6 Housing & Community Development 8 14 Leisure Services 7 11 Fire Departments 4 5 Education (Non-School Board) 4 37 Jails -2 -19 The annual survey of local government finances collects general expenditure by type (line item) as well as by expenditure category. The three types of expenditures are 1) current operations; 2) capital purchase, including land , structures, and major equipment; and 3) construction. Tables below show that current operations account for about 90% of total spending. Current operations increased $83 million from 1983 to 1984, while construction dropped $7 million. Capital purchases held about even. Municipal General Expenditures by Type: 1983 and 1984 Expenditure Type 1983 Amount ($) Percent 1984 Amount ($) Percent Current Operations Capital Purchase Construction Total General Expenditures 699,940,031 40,464,668 56,986,997 797,391,696 87.8% 5.1 7.1 782,849,872 41,907,625 50,139,075 100.0% 874,896,572 89.5% 4.8 5.7 100.0% 17 Change in Municipal General Expenditures by Type: 1983 to 1984 Expenditure Category Current Operat ions Capital Purchase Construction Total Amount ($) 82 .909 .841 1,442 ,957 -6,847,922 77 .504.876 Percent 11.8 3.6 -12 .0 9.7 Utility Expenditures With spending of $815 million , exclud ing depreciation and interest paid on debt, municipal utility spending comprises 48% of total city expenditures. Water and sewer systems accounted for $269 million , about 1/3 of all utility spending. Electric system spending was $257 million, up 29% from $200 million in 1983. Gas utilities spent $210 million . A CLOSER LOOK AT MUNICIPAL UTILITY EXPENDITURES O.5'I~U:~~~~~.1t Courts rr-1-_ / Other Acrrurusuat.on 55 MIllion 03 S179 Million / 0:0 Heaun 0 90:'0 - 515 Million 3 9~ 'o-H o uSJng / Cornrnurutv Leisure Services 3 .9% Development S66 Million S66 Million 18 Municipal airport expend itures totalled $71 million , but 87%ofthis amount ($62 million) was spent by the City of Atlanta at Hartsfield International Airport. Transit expenditures were $8 million (less than 1% of total city spending) . Change In Municipal Utility Expenditures: 1983 to 1984 Total Utility Expenditures +$78 Million +10.6% Amount Utility Amount Million ($) Percent Electr ic +57 +29 Gas 31 18 Airport 16 29 Transit -9 -52 Water/Sewer -18 -6 MUNICIPAL DEBT New municipal debt of over $200 million was incurred during the past fiscal year , more than twice the $100 million in debt that was retired. Inte rest paid on debt hit $95 million . Altogether, the 518 reporting cities ended the year with $1.7 billion in debt outstanding. Municipal Debt Summary: FY 83-84 Debt Incurred Debt Retired Interest on Debt Debt Outstanding at End of FY Millions ($) 218 100 95 1,703 19 Any exam ination of city debt in Georgia must allow for th e disproportionate inf luence of the City of At lanta. In the past year, Atlanta: * borrowed $93 million ; * issued $93 million in bonds, 90% of wh ich was in the form of airport bonds ; and * ended the year with over $1 billion in outstanding bonded indebtedness. Atlanta's large debt consists almost ent irely of three types of bonds: airport revenue bonds, (over $700 million) ; multi-purpose general obligat ion bonds, (over $160 million ); and water/sewe r system revenue bonds, ($140 million). Atlanta Debt Summary (FY 84) Category Debt Incurred Debt Retired Interest on Debt Debt Outstanding at End of FY Tota l Atlanta Atlanta Debt Bond Debt Mill ions ($) Mill ions ($) $93 $85 27 15 57 47 1,011 845 Atlanta Bond Debt As Percent of Total Municipal Bond Debt 40% 17% 55% 55% To get a clearer pictu re of municipa l deb t, the rest of this sect ion presents debt info rmation forthe othe r 517 reporti ng cities, exc lusive of the City of Atlanta. Th is enables discussion of city indebtedness without repeated allowance for Atlanta's impact. 20 Municipal Debt - All Cities Other Than Atlanta The 517 reporting cities, excluding Atlanta, ended the year with outstanding debt of almost $700 million. New debt incurred exceeded debt retired by more than $50 million , while interest paid on borrowed money topped $38 million . Municipal Debt Summary: FY 83-84 (Excludes City of Atlanta Data) Debt Incurred Debt Retired Interest Paid on Debt Debt Outstanding at End of FY Million ($) $125 73 38 691 OUTSTANDING DEBT AT END OF FISCAL YEAR (Exc ludes City of Atlanta Data) short-Term $7 Million Most municipal borrowing is in the form of revenue bonds, which account for four of every five dollars borrowed and yet-to-be paid off. Cities incurred $40 million more in revenue debt than was retired during the fiscal year , and ended the year with well over $500 million in outstanding revenue bond debt. Revenue bond debt outstanding rose about 8% over FY 82-83; general obligation debt rose 9%. 21 DEBT INCURRED DURING FISCAL YEAR (Excludes City of Atlanta Data) Short-Term $16 Million General Obligation $20 Million DEBT RETIRED DURING FISCAL YEAR (Excludes City of Atlanta Data) General Obligation $9 Million Municipal borrowing for water/sewer system improvements dominated debt in FY 83-84. Water/sewer revenue bonds comprised 80% of total borrowing ($87 million), and water/sewer general obligation bonds another 6% ($6 million). Borrowing for education by general purpose municipal governments (other than school board municipal debt) added 5% of the total. Other than water/sewer revenue bonds, all other large-scale bond activity was in the form of general obligation borrowing. 22 MUNICIPAL BONDED INDEBTEDNESS INCURRED: FY 83-84 SIGNIFICANT ITEMS (Excludes City of Atlanta Data) Purpose of Debt Bond Type Water/Sewer Revenue Water/Sewer G .O . Education (Non-School Boa rd) G .O . Public Safety G.O . Streets/Roads G .O . All Other Purposes Revenue & G.O. Total Bonded Indebted- ness Incurred Incurred Million ($) $87 6 6 3 2 4 $108 Percent of Total Bond Debt Incurred 80.3% 5.8 5.1 2.3 1.8 4.7 100.0% Water/sewer and electric system revenue bonds comprise 3/4 of outstanding mun icipal debt (excluding Atlanta's debt). Together they account for over 1/2 billion dollars in unpaid debt ($396 million for water/sewer, and $123 million for electric systems). All other large amounts outstanding are general obligation bonds: water / sewer , education (non-school board debt), streets/roads, and multipurpose bonds. Water/sewer debt, including both revenue bonds and general obligation bonds, makes up nearly 2/3 of the total municipal debt load (again , excluding Atlanta). 23 MUNICIPAL BONDED INDEBTEDNESS OUTSTANDING AT END OF FY 83-84 SIGNIFICANT ITEMS (Excludes City of Atlanta Data) Purpose of Debt Bond Type Wate r/Sewer Revenue Electric System Revenue Water /Sewer G.O . Educat ion (Non-School Board) G.O. Streets /Roads G.O . Mult i-P urpose G.O. All Other Purposes Revenue & G.O. Total Bonded Indebted- ness Outstanding Perc ent of Total Amount Bond Debt Million ($) Outstanding $396 123 37 57.9% 17.9 5.4 32 4.7 23 3.3 14 2.1 60 8.7 $685 100.0% 24 ICOUNTY GOVERNMENT FINANCES I Georgia's counties raised $1.372 billion in the past fiscal year from all revenue sources. County spending for purposes other than debt service totalled $1 .274 billion. New debt incurred outstripped debt retired by $67 mill ion, while interest paid on debt amounted to $46 million . FLOW OF COUNTY FINANCES o 0 00 UTILITY COUNTY REVENUE County revenue consists of 1) general revenues and 2) utility revenues . The two are addressed separately because proceeds from utility operations, although a part of total county funds, are typically restricted to use within utility operations, and thus are unavailable for other purposes. COUNTY REVENUES Other Revenues $199 Million Intergovernmental Revenues $288 Million Property Taxes $567 Million Sales, Excise, Special Use Taxes $174 Million 25 General Revenues Far and away the leading county revenue source is the property tax , accounting for 41 % of total county income. Reported property taxes were $567 mill ion , an increase of $49 mill ion over 1983, despite property tax "rollbacks" in counties having adopted a 1% local option sales tax. A CLOSER LOOK AT PROPERTY TAXES In te rg o ve rnm en tal Revenues 5288 M iliton Motor Vehicle 546 Million Pub lic U tili tie. 0.4% 539 M illion <,Ol her Property Tax es 540 Mill ion Real and personal property taxes constitute 78% of all county property tax collections and 1/3 of total county revenues. Real and personal property tax collections were $443 million , a 5% increase over 1983 and 12% over 1982. Motor vehicle taxes and public utility taxes combined accounted for 15% of property tax revenues ($46 million and $39 million respectively). Intergovernmental revenues , funds from other than local sources, are the #2 source of county funds. Revenues from state , federal , and other local governments added $288 million to county treasuries during the fiscal year , a decrease of 11h% from 1983 and close to the 1982 level of $289 million . However, state funds to counties rose $15 million from 1983 while federal funds dropped $20 million. Local intergovernmental revenues amounted to just $6.9 million. 26 A CLOSER LOOK AT INTERGOVERNMENTAL REVENUES Orner Revenues $ 199 Million Federa' 586 Million Loca' 57 MIllio n _ 0.5'/. Perhaps further indication of " New Federalism ", the rise in state support for county government coincided with the decline in federal transfers. For the fiscal year , state intergovernmental revenues rose to 68% of intergovernmental revenues , as the federa l share dipped to 30% from 37% in 1983 and 42% in 1982. County revenues from federal sources have dropped from $120 million to $107 million to $86 million in the past three fiscal years. The largest reported categorical revenues from other governments were health grants (from the state : $131 million) ; road and bridge funds (state: $21 million); fuel oil and mileage allocations (state: $9 million) ; and Community Development Block Grants (federal: $10 million; state: $4 mi llion). Sales, excise, and special use taxes contributed $174 million, or 13% of total county revenue. The local option sales tax was collected . by 125 counties by July, 1984, down from 127 the year before. Collections rose to $130 mill ion from $102 mil lion. Alcoholic beverage taxes contributed $25 million. Insurance premiums taxes, though relatively insignificant, amounted to over $9 million. 27 A CLOSER LOOK AT SALES, EXCISE, AND SPECIAL USE TAXES Other Revenues $199 Million Intergovernmental Rev enue s $288 Million Property Taxes $56 7 Million 9.5 % tttrIhI~IIIIIIIIII?aLo~ca~1O~Pllon Sales O. 0/ 0 1,\ , 5130 Million Insurance premlu~s Alcoholic Beverage Taxes Taxes 525 MIllion 59 Million The three leading revenue sources - 1) property taxes , 2) intergovernmental revenues, and 3) sales, excise, and special use taxescontribute more than three out of every four dollars of county revenue . The three combined increased by $78 million from 1983 to 1984, despite a drop of $4 million in intergovernmental revenues. Most add itional types of general revenue increased from 1983. Use of money and property revenue, mainly interest on investment of idle funds , netted count ies $42 million . This figure represents an increase from $28 million in 1982, due primarily to increases in locally-derived revenues available for investment. Fines and forfeitures brought in $69 million, up substantially from $50 million the previous year . 28 A CLOSER LOOK AT SOME OTHER IMPORTANT COUNTY REVENUES Service Charges 540 Million U.e 01 Money & Property 542 Mil lion Othe r MI.celianeou . 547 Mil lion Fine s, Forle itu res 569 Mil lion Properly Taxes $567 Million Sales. EXCise, SpecIal Use Taxes $ 174 M illion Change in Selected County General Revenues 1983 to 1984 (Amounts and Percentages Rounded) Total General Revenues +$96 Million + 8.5% Revenue Source Million ($) Percent Local Option Sales Tax +28 Real & Personal Property Taxes 20 State Intergovernmental 15 Use of Money and Property 9 Fines and Forfeitures 8 Licenses and Permits 6 Motor Vehicle Permits 5 Bu ilding Perm its 4 Service Charges (Non -Util ity) 2 Public Utility Taxes 2 Alcoholic Beverage Taxes 2 Insurance Premiums Tax 1 Federal Intergovernmental -20 +27% 5 8 25 16 26 13 64 6 6 9 17 -19 29 Utility Revenues Utilities include 1) water and sewer systems; 2) electric systems ; 3) natural gas systems ; 4) airports, and, 5) transit systems . A CLOSER LOOK AT UTILITY REVENUES Olher Ulilil y 53 Million <; 0 .2 % l ~ l e r g o v e r n m e n t a' Revenues 5288 M,II,on Sates Excise Spec ial Use Taxes S 1 7~ M illion Utility revenues comprise about 10% of total county revenues , amounting to $143 million in 1984. Water and sewer systems are the dominant county operated utility in terms of the number of counties involved and total revenues. Water and sewer util ities had revenues of $140 million, 98% of all county utility income. County-operated airports were a minor portion of county utility revenues at $2.5 million . Overall, county ut ility revenues were up $29 million (26%) during the year, reflecting both increased water and sewer rates and customer growth . Utility revenues had increased 26% the previous year , from 1982 to 1983. 30 Change In County Utility Revenues: 1983 to 1984 Total Utility Revenues +$29 Million +26.0% Ut i l i t y Millions ($) Percent Water and Sewer +29 +26 Gas 0 0 Airport 0 0 Trans it 0 0 Electric 0 0 COUNTY EXPENDITURES County expenditures consist of 1) general expenditures and 2) utility expenditures. Debt service - payment of both princ ipal and interest on borrowed money - is addressed separately from expenditures under the heading of County Debt. COUNTY EXPENDITURES Public Works $36 Million -, Other Utilities $57 Million $118 MiIIlon ,( 4.5% A$d ~I;I~1t~~tOl ~n 2.8% Health/Human Services $288 Million Public Safety $245 Million Highways $179 Million 1.6% Housing/Community ----- Development $20 Million 31 Expenditures for general and utility purposes were 91 % and 9% of total expenditures, respectively, close to the same percentage spl it as county revenues . General expenditures, totalling $1 .157 bill ion , were up 8% from 1983. Ut ility expenditures were $118 mill ion , down 12% from the prev ious year . The decl ine in ut ility spend ing is attr ibuted to lower water/sewer system construction outlays. General Expenditures Health and human services constitute the leading expenditure item, accounting for $288 million, or almost 23% of total county spending . Expenditures for health and human services increased $30 million from 1983, an 11 % rise. Both the level of spending and increases over the past year belie the fact that several counties have divested themselves of hospital operations during the past few years. A CLOSER LOOK AT HEALTH/HUMAN SERVICES EXPENDITURES Pub lic Wellare 515 Million \ 1 . 2%, ~