Even though $2.7 million in stormwater money will be injected into Chattanooga's budget this year, the city still could face a shortfall.
The boost in revenue won't be enough to make up for a loss of $1.5 million in sales tax revenue, general inflation or to restore money cut from last year's budget, said Daisy Madison, chief financial officer.
"It will not restore all the cuts," she said.
Last week, city officials said a property tax increase is not off the table. Property taxes were last raised in 2001.
Plans call for making the city's fund for water quality, or stormwater, an independent, self-sustaining fund.
Two proposals, one from city officials and one from a special committee formed by the City Council, call for the water quality program to be completely self-funded.
For years, about $3.8 million in city subsidies has gone to stormwater -- $2.7 million in general fund money and $1.1 million in money from the state gas tax. The general fund money can go back into that pool, officials said.
The state gas tax money, however, is earmarked to be used only for roads or streets.
Ms. Madison said the $2.7 million boost would restore the $1.5 million decline in sales tax revenue, but doesn't come close to covering inflation.
With inflation, the city would need $4.8 million just to maintain the status quo from last year, she said. And if the city wanted to restore $2.5 million cut from the budget last year, it would need even more money, she said.
"That's why the city has to do a lot of belt tightening," Ms. Madison said.
The independent stormwater committee recommended a $10 million budget for the program. The city administration proposed a $21.5 million budget.
WHAT'S NEXTThe City Council is expected to review the city's water quality proposal Tuesday. Council members heard from the independent committee last week.BY THE NUMBERS* $4.8 million: Estimated amount of money needed to maintain the current level of city services, inflation added in* $2.7 million: Amount of money that could go back into the general fund from water quality program* $1.5 million: Estimated shortfall to the city from lagging local and state sales tax collectionsSource: Chattanooga
Mayor Ron Littlefield said the committee's plan does not include at least $4 million in needed projects. Those may need to be subsidized by general funds, he said. But that could mean an 8 cent tax increase to $2.02 per $100 assessed value, the mayor said.
"We'll look at further cuts. I'm not ruling that out," he said.
Bill Raines, chairman of the council's Stormwater Committee, said Friday the $10 million proposed budget should be able to offset a property tax increase. He said the city should issue bonds to pay for $4 million in needed stormwater projects.
"They've got $10 million they can do whatever they want to do with, and they can finance $4 million," he said.
City Council Chairman Jack Benson said the city should receive new revenue from recently annexed areas around Ooltewah and Cummings Cove in Lookout Valley.