Auburn tackles budget; BOC raises taxes; Walton’s grand game

And the city is counting on that to happen next year. The budget estimates those apartments will generate over $100,000 in building permit revenue.

But what if that project is delayed? That would throw the town’s budget into chaos, both from the lack of revenue and the cost of the ANT system.

While those items are “iffy” in the budget, the biggest issue in Auburn’s financial struggles is the cost of the town’s police department. While the city did make some cuts to the police spending, that one department continues to make up half of the town’s total expenses.

That is a formula for disaster. A lot of small towns in Northeast Georgia have gotten into financial trouble because of having police departments that cost too much. No single department in any city should consume half of all spending. That model for a city government simply isn’t sustainable.

To its credit, Auburn is making some other spending cuts in its FY2013 budget. That’s a change from a couple years ago when the council seemed oblivious to the fact that it was spending more money than it was taking in.

But those cuts may not be enough. Until Auburn downsizes its police department to under 35 percent of the town’s spending, it will continue to have financial struggles.

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The Barrow County Board of Commissioners is planning a tax hike. Well, part of it technically isn’t a hike. The millage rate is going up to offset a further decline in the tax digest, thus the overall difference isn’t a technical increase.

Try telling that to taxpayers. People will pay more taxes on less value this year than last year. For most people, that is an increase even if it doesn’t meet the technical definition.

But in addition to that, the county is also raising the tax rate another mill for what it calls “capital purchases.” That is a tax hike no matter what it’s designated for. In fact, those dollars could be used for anything in the county government and won’t be restricted to capital projects. Capital projects might be the plan, but there is nothing that restricts those extra dollars.

There is no doubt that Barrow County has been ground zero for the collapse in property values. During the boom, those values were wildly inflated as speculation drove up prices to inane levels. Now those values have fallen far below what they were.

All of that has affected local governments. During the good times, governments grew and expanded. Now they are shrinking and the cuts are painful.

The Barrow BOC has made cuts in recent years and now it is raising the tax rate. Maybe the BOC should also take a look at its property tax exemptions — it has a lot —and compare those to other nearby counties.

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That Walton International is buying up a lot of Barrow County land for what appears to be speculation should get a close look by local government officials. If Walton doesn’t develop that land, some prime real estate in the county could be tied up for years.

The real tragedy of this is that Walton buys the land cheap, syndicates it into small parcels to sell to overseas investors at a very high price, and then pays local taxes on the land at a rate far below what the company is selling it for.

Walton’s plan for its Barrow property is to sit on it for several years then resell. But it has syndicated the land at such a high per acre price, one has to wonder if that property will ever resell at such a high price.
Walton won’t be hurt; it made its money upfront. But the Asian investors may not come out ahead unless local property values skyrocket in the coming years.

Although Walton has billed itself to local officials as developers, many doubt the firm will ever build anything in Barrow County. It may put in a road or an entrance to some of its holdings, but it’s doubtful that Walton will ever carry out the grand plans it shows to local officials.

And government officials shouldn’t be so naïve about what this grand game is all about. It’s about land speculation, not investing in the community.

Mike Buffington is co-publisher of the Barrow Journal. He can be reached at mike@mainstreetnews.com.