Atlanta stagnating as surrounding counties keep propelling Georgia's growth, Moody's says.

ATLANTA -- Although the 20-county Atlanta metropolitan region continues to drive economic expansion in Georgia, the region's core city faces growing problems, according to an up-coming report from Moody's Investors Service.

"The city's finances have become more delicately balanced due to a slowdown in revenue growth and expansion of service requirements," said the report, which Moody's plans to release next Tuesday.

"Atlanta has lost population since 1970, has become poorer, and the business sector has stagnated,". the study continued. "Pressure for no new taxes has resulted in mounting fiscal problems, which are expected to continue at least through fiscal 1995."

In contrast to Atlanta problems, however, Moody's stresses the expanding economy and widening tax base of the metropolitan area as a whole, which the report said "continues to be the driving force in the state's expansion [as] population, employment, and wealth levels continue to expand more rapidly than state and national levels."

Speaking of the counties surrounding Atlanta, the report said, "Provided that area local governments can continue to maintain manageable debt levels in meeting those infrastructure needs, the overall long-term outlook for the [metropolitan statistical area] counties is positive."

In addition to the 20-county Atlanta region, the study covers the state's six other metropolitan statistical areas. In declining order, by population, they are: Augusta, Macon, Columbus, Savannah, Athens, and Albany.

The report, written by David Z. Alter, a Moody's assistant vice president, and Gary Mescher, a senior analyst, is the rating agency's first comprehensive analysis of all the metropolitan areas in a state, Alter said. He noted that the report covers more than two-thirds of the state's population and more than $6.6 billion of local debt.

"What this does is allow us to begin to see all the parts of a state's economy working together," Mescher said yesterday. "The socioeconomic factors are the bedrock upon which our ratings are based."

Moody's rates the general obligation debt of Atlanta Aa, of Augusta A, of Macon A1, of Columbus A1, of Savannah Aa, of Albany A, and of Athens A1.

In its review of the Augusta statistical area, the report found that the strong overall growth of the four-county area was also in sharp contrast to the stagnation of its core city.

"With its base in manufacturing, health care, medical research, and the military, [the Augusta metropolitan statistical area] should continue to grow as it has," according to Moody's. But "because of [the city of] Augusta's inability to expand. it has experienced a pronounced economic decline and subsequent fiscal difficulties," the report said.

Those difficulties, the report continued, have forced the city to balance its budget with large transfers from its water and sewer system. "Officials are now faced with increasing the transfers even further or extracting more revenue from residents who can ill afford it," the report said.

In its analysis of the five-county Macon area, the study found the area fiscally vulnerable because of its "dependence on military contracts;" despite the city of Macon's annexation in the 1960s of much of surrounding Bibb County.

"Should base cuts or federal contract reductions impact the MSA, the area's long-term economic outlook would weaken," the report said.

Moody's review of the four-county Columbus metropolitan statistical area stressed the "financial stability" of its core city, which consolidated with Muscogee County in 1970.

The city's challenges, the report said, are "attracting and keeping large employers as well as improving revenue-raising flexibility."

The four-county Savannah region, Moody's found, "is notable for its diversity" and "should continue the growth it has experienced." In its analysis of the city of Savannah, the rating agency said the city "faces a fiscal tightrope," but has benefited from a "healthy tourism industry" and large annexations since 1979.

Moody's found that the recent strong growth of the three-county Athens metropolitan statistical area -- which has been dominated by the expansion of the University of Georgia -- could slow following the state's plans to cap student enrollment. But Moody's also noted that Athens has benefited from its consolation with Clarke County 1991, allowing the city "to widen its tax base substantially."

Moody's also said that the economy of the Albany metropolitan area, which includes Lee and Dougherty counties, has remained stagnant over the last decade.

"This leaves the MSA vulnerable to the loss of any large employers and taxpayers," the rating agency said. "Retention of existing businesses and the success at attracting new companies is the key to the region's future."

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