Happy New Year, local governments.

July 1 marks the first day of fiscal year 2011 for many area cities and counties, the reset point where new budgets take effect.

This is the start of the third austere budget year of the recession and governments have tackled the challenge differently.

All tax revenues, including property taxes, local option sales taxes and even motor vehicle taxes have declined as a result of unemployment and reduced customer spending.

Governments have made extensive cuts, but for some it isn’t enough to make a balanced budget.

The city of Gainesville included a tax increase to shore up its $25.5 million 2011 budget.

The council increased the tax rate from 1.43 mills to 1.69 mills, which represents an increase of $26 per $100,000 of property. The millage rate is $1 of tax for every $1,000 of assessed property value.

The additional money will be used to support the federal Adequate Fire and Emergency Responder grant that allowed the city to hire 18 additional firefighters. The federal government will provide a portion of the salary for the firefighters and the city will fund the remainder of their salary with tax dollars.

Lumpkin County plans to increase its budget in 2011. Its fiscal year does not begin until January, but the board of commissioners is considering a 0.331 millage increase, which will take the county from 6.987 mills to 7.318 mills.

The tax increase will allow the county to take employees off of a monthly furlough plan.

Even with a tax hike, Lumpkin County’s proposed budget is $15.7 million, down from $16.6 million in 2010.

“We’re bare bones,” said Lumpkin County Manager Stan Kelly. “It’s been a challenge.”

The Forsyth County Board of Commissioners is still working to reduce a $13.3 million deficit. Forsyth is proposing a tax increase of 1.48 mills to combat the shortfall but has not yet approved a final budget.

Hall County departments were asked to hold the line in the 2011 budget. The $90.4 million budget is nearly a mirror image of the 2010 budget and the tax rate remained the same as last year at 6.25 mills.

County Administrator Charley Nix said this year was a much easier budgeting process because so many of the difficult cuts had already been made leading up to the 2010 budget.

This year, the goal was to keep cutting where possible and keep budgets at or less than in 2010.

“We’ve managed to do it without reducing services to the residents,” said County Administrator Charley Nix. “It’s not like the private sector. You still have your demand for services in government ... the demand does not go down. It actually is increasing in some areas.”

White County has no plans for a tax increase and its $17.3 million total budget will allow the county to restore contributions to employees retirement accounts, said county clerk Shanda Smallwood.

From the looks of it, Flowery Branch is in a different world with its 2011 budget.

On June 17, the city council passed a $3.6 million budget for 2011 that is not only 3 percent less than the 2010 budget but includes more money for road improvements, restores employee raises and does away with employee furlough days.

The tax rate will remain the same as 2010.

The Lula City Council was once again able to approve a budget that includes a millage rate of zero. The city does not collect property taxes. Its roughly $1 million budget will be funded by sales tax and other sources.

“In essence, we don’t offer all the services other communities do, but we’re certainly good stewards with our money,” said Lula City Manager Dennis Bergin.

Bergin said Lula will be holding off on some projects, including its streetscape, as a result of the slow economy.
“It’s just not going to progress as quickly,” he said.

— Times reporter Jeff Gill and Times regional reporter Alyssa LaRenzie contributed to this reporter.