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