City braces for less than budgeted revenues

CLEVELAND, Tenn. — Flat property tax collections and lower-than-expected sales tax revenue are worrying city hall.

City Manager Janice Casteel told the Cleveland City Council on Monday the 2008-09 budget shows a $1.3 million shortfall.

Cutbacks whittled that difference to $800,000, she said. Department heads began meeting Tuesday to bridge that remaining difference.

“No paving, no police cars; that’s where we are,” Mrs. Casteel said. There won’t be any new hires, including a proposed assistant to the city manager, she said. The new fiscal year begins July 1.

City government relies on “spring money” to get a boost into the next fiscal year, Mrs. Casteel noted. That is money budgeted for the current year but not spent. It is usually used for spring projects, such as paving.

“There is no spring money this year,” Mrs. Casteel said.

That also means the anticipated $5 million cost for a Cleveland High School science building may not be covered.

Councilman Richard Banks searched for alternatives, including whether any county money might be available.

“I think they voted education as their first priority,” he said of Bradley County commissioners’ listing spending priorities last week. Anytime the county raises money for education, it must give a third to city schools based on student population.

A search committee is seeking a site for a new county school. But Mrs. Casteel said there are no assurances about money until the county adopts its own budget in July. And if there is any county money, she said, it might not be available until fall.

“I know nobody wants to hear this and it’s not like I’m proposing it, but how much of a property tax would it be to fund something like that?” asked Councilwoman Bambi Hines.

Mrs. Casteel said it would take four to five cents for each $100 of assessed property value. The city’s property tax rate is $1.65 per $100.

“We’ve been at $1.65 for how long? I know ever since I’ve been here,” Mrs. Hines said.

But Mayor Tom Rowland said stores opening in a new shopping area on Paul Huff Parkway should boost the city’s sales tax take.

Last weekend Target opened at the Cleveland Towne Center with a packed house of shoppers. The center also has Kohl’s and Circuit City.

“Given what has happened in the past few days I believe sales tax (receipts) will pick up,” Mr. Rowland said.