If budgeting is a balancing act, then Signal Mountain is walking a tightrope.
While "most departments are under budget right now" at the midpoint of the fiscal year, the state may tip the town's overall scales.
"Even though right now the city is fine, we possibly could not get as much revenue as we predicted," reported Town Manager Honna Rogers.
Rogers said the town faces up to a $69,410 revenue loss if 2010 Census numbers are in line with the dwindling population numbers others have predicted. The state estimates the town's population at 7,725. Towns receive roughly $110 per person from the state's tax share. Estimations from the Census website in 2009 had the town at 7,094 residents.
"If we lose $70,000 there's going to have to be some kinds of changes in services or some sources of revenue," Rogers said. "I can't see us losing $70,000 and keep doing things the same."
Councilman Dick Gee mentioned that the town's declining population was one of the issues discussed in last fall's election.
"I can't wrap my head around it," said Councilwoman Susan Robertson.
"It's my experience that the intersections are busier," added Councilwoman Annette Allen.
Huge Hall tax impact
Rogers said the town would lose hundreds of thousands of dollars if Hall income tax revenue is taken away from municipalities and discussions at the state level to make that change are gaining ground after years of debate.
"I think it is a real threat," Rogers said. "The lieutenant governor is behind this now and is in favor of it. Obviously in March they're going to be talking about it. I don't think we can wait until March. Should that go away it's something that's even a much bigger hit on the town of Signal Mountain than anything else."
She estimated that an average 10 to 12 percent of the town's budget comes from the Hall tax every year. The Hall tax is imposed on individuals and other entities receiving interest from bonds and notes and dividends from stock. Last year Hall income tax revenue for the town of Signal Mountain totaled $420,000.
"Assuming we want to keep budget levels the same, that is a 16-percent increase in the tax rate, which equals 25 cents to make up for that loss of Hall income tax alone," Rogers said.
She urged council members to begin calling state representatives in support of keeping the Hall tax.
She said one of her own conversations with state Rep. Richard Floyd revealed he was "absolutely opposed to it going away but not opposed to a cap." The tax currently applies a 6 percent tax to interest from bonds and notes and dividends from stocks for almost every filer. A cap would limit that tax to those who make over a certain amount from these sources.
"They're in a two-year cycle so possibly this year it gets a lot of debate, a lot of studying, and nothing happens until next year," said Rogers.