Privatization, Fiscal Responsibility Keep Sandy Springs on Strong Footing, Despite Recession

Sandy Springs, Georgia Mayor Eva Galambos told a local chamber of commerce meeting this week that despite a revenue hit and recessionary factors that are blowing gaping holes in municipal budgets nationwide, the young—and largely privatized—city is weathering the fiscal storm quite nicely. According to Sandy Springs Reporter (emphasis mine):

[T]he thrust of the mayor’s speech was about the health of the city, which she said is “exceptional” when compared with the financial state of the federal government.

If you compare us to the city immediately to the south of us (Atlanta), the state of the city of Sandy Springs is superb,” she added, eliciting much audience laughter. “We are very pleased that we have been able to hold our head above water in these turbulent times, and we think we can continue to do so.”

Reporting that the general fund budget for the fiscal year that started July 1 is about the same as it was for fiscal 2009, the mayor told the audience: “That says a lot. Here we are in a period of declining economic activity, and we are able to sustain the same level of budget that we did a year ago.”

Galambos said total revenues are projected to decline a little more than 10 percent this year. Property taxes are estimated to be down about 10 percent, primarily a commercial property problem; sales taxes down 8 percent; businesses taxes down about 18 percent because they are based on revenues; and permits off about 18 percent, mostly in building permits.

She attributed the good state of the budget to the fact the city was able to apply $14 million left from fiscal 2008 to this year.

The mayor’s checklist of progress included three times as many police officers as operated before incorporation, paving 69 miles of streets, building about 6 miles of sidewalks, getting ready to open a joint 911 center and having “the finest emergency rescue service in the state.”

We have done that with the same tax rate as we had before,” she said.

Galambos cited three factors in the city’s accomplishments: The public-private partnership running the city allows more flexibility and efficiency in government operations; the city has a cohesive government — a council that gets along and “doesn’t grandstand”; and “we have a superb staff … sharp management and a sharp pencil at the top of the staff.”

As I wrote Tuesday, Sandy Springs and the other new Georgia contract cities can teach an important lesson to “traditional” cities like Atlanta: you can save tax dollars and improve service delivery by embracing privatization. While other cities are gnashing their teeth over privatization and considering tax and fee hikes, the most contentious budget issue in Sandy Springs is whether or not to lower taxes in light of downgraded revenue forecasts.

That’s a problem many other cities and counties would probably like to have right now.

More on Sandy Springs here, here, here, here and here.

Reason Foundation’s Privatization Research and Commentary

Leonard Gilroy is Senior Managing Director of the Pension Integrity Project at Reason Foundation, a nonprofit think tank advancing free minds and free markets. The Pension Integrity Project assists policymakers and other stakeholders in designing, analyzing and implementing public sector pension reforms.

The project aims to promote solvent, sustainable retirement systems that provide retirement security for government workers while reducing taxpayer and pension system exposure to financial risk and reducing long-term costs for employers/taxpayers and employees. The project team provides education, reform policy options, and actuarial analysis for policymakers and stakeholders to help them design reform proposals that are practical and viable.

In 2016 and 2017, Reason's Pension Integrity Project helped design, negotiate and draft pension reforms for the state of Arizona's Public Safety Personnel Retirement System and Corrections Officer Retirement Plan, which both passed with overwhelming bipartisan support in the state legislature and were signed into law by Gov. Doug Ducey.

Gilroy is also the Director of Government Reform at Reason Foundation, researching privatization, public-private partnerships, infrastructure and urban policy issues.

Gilroy has a diversified background in policy research and implementation, with particular emphases on competition, government efficiency, transparency, accountability, and government performance. Gilroy has worked closely with legislators and elected officials in Texas, Arizona, Louisiana, New Jersey, Utah, Virginia, California and several other states and local governments in efforts to design and implement market-based policy approaches, improve government performance, enhance accountability in government programs, and reduce government spending.

In 2010 and 2011, Gilroy served as a gubernatorial appointee to the Arizona Commission on Privatization and Efficiency, and in 2010 he served as an advisor to the New Jersey Privatization Task Force, created by Gov. Chris Christie.

Gilroy is the editor of the widely-read Annual Privatization Report, which examines trends and chronicles the experiences of local, state, and federal governments in bringing competition to public services. Gilroy also edits Reason's Innovators in Action interview series, which profiles public sector innovators in their own words, including former U.S. Transportation Secretary Mary Peters, former Florida Gov. Jeb Bush, former Indiana Gov. Mitch Daniels, former New York City Mayor Rudy Guiliani and more.

Gilroy's articles have been featured in such leading publications as The Wall Street Journal, Los Angeles Times, New York Post, The Weekly Standard, Washington Times, Houston Chronicle, Atlanta Journal-Constitution, Arizona Republic, San Francisco Examiner, San Diego Union-Tribune, Philadelphia Inquirer, Sacramento Bee and The Salt Lake Tribune. He has also appeared on CNN, Fox News Channel, Fox Business, CNBC, National Public Radio and other media outlets.

Prior to joining Reason, Gilroy was a senior planner at a Louisiana-based urban planning consulting firm. He also worked as a research assistant at the Virginia Center for Coal and Energy Research at Virginia Tech. Gilroy earned a B.A. and M.A. in Urban and Regional Planning from Virginia Tech.