Atlanta’s top finance chiefs urged the city’s elected leaders to cut back on spending after early projections anticipate a more than $33 million budget deficit for Fiscal Year 2025.
It’s only the first quarter of the new fiscal year, but big investments in law enforcement and salary increases to retain employees may put the city in a tricky financial position, finance officials say.
By the end of June 2025, the Department of Finance has predicted a $50.6 million surplus in revenues but a $83.9 million expense overrun — putting the city into a $33 million hole.
“Essentially, this is a result of the city’s intent to utilize fund balance to invest into employees and a lot of critical needs for the city of Atlanta,” Chief Financial Officer Mohamed Balla told council members Tuesday.
“We are at the moment now when we have to start thinking about this balancing approach of revenues and expenses,” he said.
The city’s finance experts said that additional dollars toward law enforcement to fund programs like take-home police cars, salary increases for officers and price tag of the soon-to-open public safety training center are the biggest contributors to inflated costs.
“We continue to see significant public safety expenses,” said Tina Wilson, the city’s deputy chief financial officer. “They’re dominating the overruns for this year.”
The new contract with Fulton County for animal services is another unexpected increase to expenses. Last winter, the Dickens administration and county officials butted heads over the inflated cost which Atlanta eventually agreed to pay.
Wilson said that the special election — triggered when Former City Council member Keisha Sean Waites resigned — and subsequent runoff also put a big financial burden on the city.
“No need to panic, but (do) we need to tap the spending brakes?” Finance Committee Chairman Howard Shook asked finance officials, who responded with an enthusiastic “absolutely.”
Balla said it was too soon to consider cost-cutting measures like selective hiring freezes.
But Shook added that while City Council oversees and approves city spending, the Dickens administration is also responsible for cutting back.
“Council is not the only one, with an appetite to try to improve people’s lives by spending money on various projects — there’s a lot of these impulses that come from the administration as well,” he said. “We’re hardly the only people that recommend spending large amounts of money.”
Council member Alex Wan, former chair of the finance committee, was cautiously optimistic that major investments the city has made in employee retention will lead to fewer job vacancies and less overtime hours.
“We’re not used to seeing red numbers and big red numbers,” Wan said. “So, in a way, I think this was a good reality check for us.”
Atlanta Mayor Andre Dickens has another reason to be concerned. The city scored its highest bond rating ever this year when Fitch Ratings recently upgraded Atlanta from an AA+ to AAA rating.
During an interview with The Atlanta Journal-Constitution about the credit rating in September, Dickens touted the city’s investments in public safety and employee benefits. But the first-term mayor also said now the pressure is on to keep that score from dropping.
“Now we’ve got to keep it,” Dickens said.
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