Buckhead Cityhood Could Cost Atlanta Schools $332 Million: Report

ATLANTA — Incorporating Buckhead City would cost the Atlanta Public Schools approximately $332 million each year and carve another $252 million annually in tax revenue from the City of Atlanta.

This data is according to an opposition study commissioned by the Committee for a United Atlanta, the organization leading the fight against the Buckhead secession movement.

Released just days after the Buckhead City Committee announced the favorable results of a feasibility study required to move forward with a ballot initiative to form a new city, the Buckhead De-Annexation Fiscal Analysis concluded that starting Buckhead City would harm all parties involved.

“Issues regarding service of current debt and future debt, economic development disunity, and reduced community services are all likely to be significant difficulties for both the City of Atlanta and the Buckhead area if a de-annexation should move forward,” the report’s executive summary states. “Overall, if the Buckhead area of the City of Atlanta de-annexed from the city, both entities, as well as APS, would stand to lose financially, economically, and socially.”

The grassroots movement to split Buckhead from Atlanta gained momentum in late 2020 as crime numbers — particularly for violent crimes — escalated in the affluent community. Other concerns included tax rates and infrastructure. By spring of 2021, what had started as an exploratory committee had grown into the BCC, an organization with ample funding for a feasibility study and the backing of lawmakers willing to sign onto legislation for a ballot referendum.

In his July introduction of the Committee for a United Atlanta — BCC’s direct competition — in the Saporta Report, Buckhead CID executive director and Buckhead Coalition president Jim Durrett said the new opposition organization stood to find solutions to the issues confronting Atlanta.

“Rather than engage in such a divisive and complex legal effort, the Committee for a United Atlanta will work to help elect a city government that will improve public safety and city services and restore public confidence,” Durrett wrote.

As the Buckhead City Committee pointed to reasons why a well-to-do Buckhead City could flourish if it separated its revenue from Atlanta, the De-Annexation study, compiled by Atlanta-based economic development consulting firm KB Advisory Group, pointed to several consequences of leaving Atlanta.

BCC’s feasibility study also proposed paying fees to APS, although it failed to acknowledge that the state’s constitution prohibits the formation of any new school districts to coincide with the formation of any new municipalities.

Other takeaways from the analysis included the projected population of a new city at 101,564, based upon estimates drawn from previous U.S. Census data, and data showing that Buckhead accounted for 25 percent of Atlanta’s total workforce in 2020.

Primary among those takeaways, however, would be that refinancing debt accrued by Atlanta in its current form could prove tricky for any efforts to split Buckhead from the city.

“The city’s current debt rating explicitly counts Buckhead area revenues in considering the city’s overall ability to service existing and new debt to support the infrastructure needed for a growing community,” the report says. “There is little in previous examples to indicate how much a debt rating could drop if the city were to lose over $250 million in annual revenue, but it is known that any drop in ratings could result in substantially higher interest rates on newly issued bonds, which would result in higher taxes and delays in the building of needed infrastructure.”

This would impact a new Buckhead City as well, the analysis states.

“For Buckhead area taxpayers, the ability of a new municipality to establish the municipal equivalent of a credit rating could result in increased tax rates as the new entity looks to refinance debt assumed for existing infrastructure and engages in start-up spending,” the report says. “It is almost certain that both the City of Atlanta and a newly financially independent Buckhead will see tax rates rise because of a loss of combined financial resources.”