published Thursday, June 23rd, 2011

Cuts vs. logic and need

In hard economic times, political leaders usually find it easier to cut services rather than raise taxes modestly to cover the cost of inflation and unexpected burdens. Federal and state officials can get away with cutting programs more easily than local officials, however. When local officials cut services, the impact is more immediate and concrete.

The actions Monday and Tuesday of municipal officials in Signal Mountain and Collegedale, respectively, are illustrative.

The former voted down a proposed 15-cent property tax hike to keep up its bond payment schedule for the new Signal Mountain Middle-High School. The council unwisely chose instead, on a 3-1 vote, to extend its payment schedule on the bonds for five years, to 2021 — a move expected to add another $150,000 in interest costs.

Collegedale’s town commission members voted 3-2 to reject a 22-cent property tax increase that is needed to keep open its public library — the only branch of the Chattanooga-Hamilton County Bicentennial Library that lies outside Chattanooga’s city boundaries. It would take the $400,000 in revenue the increase would generate to keep the branch operating as it has been.

Collegedale’s library dilemma flows from the expiration of the city-county sales tax agreement. When the city let the 45-year-old sales tax agreement expire, it assumed the burden of funding the library without help from county government. But Collegedale has to pick up the cost of the branch there.

The actions of both local governments reflect badly on their sense of public priorities, especially given their relatively low tax rates. Collegedale commissioners recognized that, and agreed to reconsider the issue of library funding at a July 5 meeting.

Chattanooga’s property tax rate is $2.309 per $100 of assessed valuation. The rate in Signal Mountain, a more affluent community, is $1.5134. Collegedale’s rate is $1.1587. Chattanooga residents would find such rates so much cheaper that they wouldn’t blink at keeping up the bond schedule or keeping the library open.

Chattanooga’s City Council, in fact, is considering spending some of the city sales tax revenue that it has reclaimed to help fund some of the civic-service agencies whose budgets County Mayor Jim Coppinger has rashly proposed to slash or zero out.

Few of our local governing officials would relish slashing budgets for vital services. But it’s also apparent that few possess the will to adopt the sort of periodic tax increases that are occasionally needed to keep pace with inflation, though their governing bodies are not immune to increases in the cost of asphalt, fuel, utilities and insurance. Those added costs occur regardless of a community’s rate of growth.

The Hamilton County Commission, like most municipal governments here, has on blinders to the cost of inflation. All have become locked into the illogical mantra of no tax increases, even when they’re justified. The county hasn’t raised the property tax rate since 2007, and neither have eight of the county’s municipalities, including Collegedale and Signal Mountain.

The county property tax rate has fallen from $3.154 to $2.7652 in that period due to state requirements for local governments to reset property tax rates following mandated, periodic reappraisal programs. The rates must be reduced to a revenue-neutral basis on existing property, and certified as such, following reappraisals in order to prevent tax-creep through inflation on property values.

Given these straits, vital services are wrongly diminished, and the pain needlessly spreads.

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