published Sunday, May 16th, 2010

City faces tax hike to close fund gap


by Cliff Hightower
Audio clip

Mayor Ron Littlefield

Mayor Ron Littlefield will propose a property tax increase to pay for more police, to give pay raises and to restore funding to several city departments next year.

"It's a budget that puts us on sound footing," Mr. Littlefield said.

The mayor declined to specify the size of the proposed tax increase, but he said the additional money would go to beefing up the police department, hiring more employees and keeping recreation centers open longer, among other priorities.

Some council members said Friday they may not be able to swallow a property tax increase that restores that much funding to city departments. Councilman Jack Benson said the list of added funding needs is long for a municipality feeling the effects of a recession.

"It sounds to me like that's going to take a pretty huge increase," he said.

He said he prefers to see a budget that reflects a tax increase this year and maybe a small increase next year. When the council's budget sessions start Tuesday, he plans to look not only at what the city can do to increase its revenue, but what it can do to cut spending.

Mr. Littlefield's staff is expected to present a budget plan at 2 p.m. Tuesday. Over the next several weeks, the City Council will meet weekly to discuss budget issues.

WHAT TO EXPECT

Mayor Ron Littlefield said the following items would be included in his budget being presented Tuesday:

* Increase property tax

* Expand police department

* Restart employee pay plan

* Restore recreation center hours and programming in Parks and Recreation Department

* Add employees

* Increase in funding to outside agencies

* Increase in pension funding

* Restore employee longevity pay

PROPERTY TAX RATES

* Chattanooga: $1.939 per $100 of assessed value

* Knoxville: $2.46 per $100 of assessed value

* Memphis: $3.1957 per $100 of assessed value

* Nashville: 57 cents per $100 of assessed value*

* Nashville is a metropolitan government; residents pay a higher Davidson County tax rate.

Source: Chattanooga

LAST TAX HIKE

The last time the Chattanooga City Council raised property taxes was Sept. 11, 2001. The rate increased 48 cents to $1.939 per $100 of assessed value.

Last month, city department officials presented budgets to the council under three scenarios: One that increases spending by $25 million to $197 million; one that maintains spending at the current $172 million level; and one that cuts spending by 5 percent.

The mayor has said his budget does not fully restore funding to the level it needs to be, but it does include necessary spending increases. One of those is raises for city employees.

"Most people will get something," he said. "It won't be major."

The city has existed on a "shoestring budget" for years, he said. The last property tax increase was on Sept. 11, 2001. The rate is currently $1.939 per $100 of assessed value, according to city records.

Councilwoman Carol Berz, chairwoman of the Budget, Personnel and Finance Committee, said she likes the idea of implementing an employee pay plan and opening the parks and recreation centers. But the council needs to know how much these moves will cost and what they mean for the city.

"If we increase some of the costs to the people, we will have to see what the benefits are," she said.

Councilman Russell Gilbert also wants to see costs and benefits. He wants to read the fine print and see what else could be paid for by a proposed property tax increase, he said.

"What other things is this going to pay for?" he asked.

Council Chairman Manny Rico said he doesn't know if he and other council members could handle a property tax increase of 50 cents to 60 cents.

"I was hoping we'd do just enough to get by this year," he said.

Melanie Purcell, assistant director of the University of Tennessee's Municipal Technical Advisory Service, said she did not know of any other cities looking at property tax increases.

"Everybody has hit a wall, " she said. "Everybody is looking at everything."

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semjr4642 said...

The City Budget problems are real and very serious.There are only two ways to fix the problem, cut services and lay off people or raise taxes and occasionally a combination of both so some will have you believe.I need someone to answer the following questions before concensus is reached.How many retired city employees are still on city payroll( double dipping).What is the average income,tax rate and unemployment rate of the cities used in the property tax rate comparisons?What will the new prorty tax rate be? What will the pay increase be for city workers and what will be the cut off?. (will upper level pay employees get pay increases)?.Is the county going to pay the 6 to 10 million it owes the city? Since the recreation centers have been closed(some on Saturday and under staffed) will the tax increase restore them to full staff and allow them to open on Saturday? When will the City of Chattanooga receive tax revenues from the Volkswagen Plant itself?.( year and amount, please)What is the difference between the City and County tax rate?How many consultants does the city employ each year and at what cost?

May 16, 2010 at 12:05 p.m.
tnlobo420 said...

How can you justify giving pay increases and hiring more people by imposing your strict rule of law by taking from the people who were smart enough to purchase property. Do you not realize that many people are still unemployed, or disabled. The rest of the country is going bankrupt, yet the Mayor wants to squeeze blood from a turnip to create jobs and pay increases. The city should be acting responsibility like all others by CUTTING back on city services and expenses – not spending more – how stupid is that. Littlefield your business sense really sucks as mayor of our fine city. You do not freeze property taxes for the elderly or disabled, you are very short-sighted in your financial plans and you honestly don’t have the best interests of your citizens at heart. Shame on you Littlefield, wanting to raise property taxes – you should be impeached. You leave us with a legacy of fool-hardy decisions, high taxes and high unemployment. You just raised property appraisals during the recession and you want to screw us over again – SHAME ON YOU.

May 16, 2010 at 7:59 p.m.
joecrash1 said...

Chattanooga is trying its best to be like Charlotte in the Peoples Democratic Republic of NC. Wait until Littlebrain wants to impose a personal property tax for cars, boats, trailers (utility, campers, boat) RVs AND your little dog too. No kidding, livestock AND dogs are taxed as personal property. All in the name of increasing the police department which will never happen. It never has.

May 17, 2010 at 5:53 a.m.
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