Budget scrutiny: Council members voice opposition to a tax increase
Published 11:38 pm Tuesday, April 28, 2015
Although City Manager Brian Alligood’s proposed budget for the upcoming fiscal year calls for increasing the property-tax rate by 1.5 cents per $100 valuation, don’t expect that recommendation to stand.
Washington’s City Council, during its meeting Monday, made it clear it wants to avoid a tax increase, especially Council members Doug Mercer and Bobby Roberson.
“I have a little bit of an issue with the increase on the taxes in the fact that the business privilege license was actually a revenue source from the business community. The recommendation is to actually spread the cost against all the taxpayers. So, I would be against the cent and a half increase,” Roberson said.
Mercer has a similar view on the proposed tax increase.
“We’ve sat here for almost two and a half hours, and we’ve listened to a presentation, and there’s not been the first word said about let’s cut this or let’s cut that. I said early on I am not going to vote for this budget if we put the $190,000 payment in lieu of sales taxes in there. I’m not going to vote for this budget if we put (in) the $120,000 — cent-and-a-half property tax increase,” Mercer said. “We can make the decision tonight to tell the staff to adjust that or we can wait until two weeks from now when we get ready to vote on the budget, and I’m going to vote against it.”
Roberson responded: “I’d much rather go through the budget, hear everybody’s input and then on the final couple of nights make recommendations on the budget where we are going to make the cuts. That’s what we did last year.”
Mercer replied: “So, you went to wait until Thursday night and give him (Alligood) a long list and say, ‘Go back and fix it?’”
Roberson responded: “Well, that’s fine with me. I’ll be here as long as you want to be here.”
Councilman Richard Brooks said he prefers giving staff a complete list of changes to the budget instead of “doing bits and pieces.”
Alligood said what he heard the council debating is $310,000 (the $120,000 the increase in the property-tax rate would generate and the $190,000 payment in lieu of taxes).
“You need to tell us which service to take away that the City of Washington has been providing — $310,000 worth. Because if we go in and pull out $310,000 worth of money from existing departments and leave the services the way they are, all you’re doing is handicapping those folks and not letting them do their jobs. We’re pushing the can on down the road a little bit longer and you’re going to have more maintenance issues later,” Alligood said. “You’ve either got to raise revenues or you’ve got to cut expenses. If we’re going to say you’ve got to do away with $310,000, then please don’t make us go in and nickel and dime departments to where they can’t do their jobs because they you’ve made them so inefficient you might as well cut them anyway. So, tell us what services you want to do away with, and I mean whole programs. … That’s what it comes down to. Again, I’m not telling you anything you don’t already know.”
The $120,000 that would be generated by increasing the property tax rate is designed to replace the revenue the city once received from issuing business privilege licenses on an annual basis. The N.C. General Assembly took that authority away from cities and towns by passing a law, which takes effect July 1.
“This recommended tax increase is based solely on the loss of revenue fro business privilege licenses that were repealed by the NC General Assembly during its last session,” Alligood wrote in his budget message to the council.
The proposed budget also allocates $190,000 (payment in lieu of sales tax revenue) because of the loss of revenues created by changes in the sales-tax distribution formula adopted by the N.C. General Assembly last year. Mercer opposes it.
Mercer said he believes the proposed budget underestimates some revenues substantially.
“If you cut some of the expenses, you can get it down,” he said. “I can come close to $250,000, $300,000.”
The council was to meet again Tuesday night for more budget work.
The council continues a series of budget sessions at 6 p.m. today. If needed, a fourth session could be held at 6 p.m. Thursday.