Property tax hikes span Hamilton County

Property tax hikes span Hamilton County

July 7th, 2011 by Kate Belz in News

A year after Chattanooga increased its property tax, other municipalities across Hamilton County seem to be following suit.

But the decisions haven't been made without the drama expected of budget season: bitter arguments, contentious meetings, postponed decisions, surprise votes and abrupt about-faces.

Soddy-Daisy and Collegedale already have voted to increase their property taxes, while East Ridge and Signal Mountain are poised to do the same in the next few days.

Collegedale voted 4-1 Tuesday night to increase its property 18 cent tax increase in order to continue funding its library, which lost its funding when Chattanooga's long-held sales tax agreement with the county expired in May.

The move was a reversal from its 3 to 2 vote June 20 against a 22 cent tax increase.

"The turnout at the meeting showed that we have really mixed feelings here. We had half who were willing to have a tax increase to save the library, and half wanted to do whatever it took to avoid an increase," said Christy Pratt, human resources director for the city.

Only Vice Mayor Tim Johnson voted against the lowered 18 cent tax increase, which will make the city's rate $1.34 per $100 of assessed property.

Since the library now will be funded by Collegedale residents, its name will reflect the change.

"Council voted pretty much immediately to change the name to Collegedale Library," Pratt said.

Pratt said the city signed a $400,000 contract with Library Systems and Services Inc. to run the library and manage interlibrary loaning. She said it was unclear at this point whether or not the Collegedale Library will maintain a book exchange with Chattanooga's branches.

Signal Mountain

Signal Mountain's 15 cent property tax increase proposal also comes as a U-turn from its original 3 to 1 decision during its first budget meeting to nix the tax hike by directing fewer dollars towards paying back its debt for Signal Mountain Middle High School.

Now the 15 cent increase to the town's current rate of $1.51 per $100 of assessed value is back on. Those in favor include Councilwoman Annette Allen, who missed the first budget reading; Councilwoman Susan Robertson, who has been for the increase from the start; and Mayor Bill Lusk, who originally voted against it.

Lusk said he changed his mind after thinking about implications of paying back the school's debt at a more delayed rate and after talking to town manager Honna Rogers.

"I've always had concerns about directing money away from the debt," he said. "I thought that if we could agree that this would be a one-time thing I could get used to the idea. But according to our town manager, it looks like we're going to have to increase taxes next year or the year after that if we're going to maintain our services."

For the past few years, the town has designated 30 cents of its property tax rate toward paying back debt on the school. Lusk said by increasing taxes the town will be able to keep paying its school debt back at an accelerated rate and avoiding $150,000 in interest.

But it means the city once again faces a $317,000 deficit, something Lusk says only a property tax increase will fully tackle.

"We're at the point where we'd have to cut amenities, and I don't think anyone here wants to see that," he said.

Lusk said he had roughly two dozen residents say they were willing to take a tax increase to pay the school debt, and that he got only four comments from folks who were against a tax increase. One of those was his wife, who told him she thought it was bad timing because of the economy.

Resident Bruce Caldwell shares those sentiments.

"I just think its wrong to increase taxes in this time when everybody's expenses are coming up," he said.

Caldwell also says he also doesn't think the city has done enough to raise public awareness of a potential increase, and that changing the vote at a work session didn't allow for enough public input.

"They put up big banners up on the street when they have a meeting, but everything gets real quiet when you're talking about a tax increase."

The vote on the final reading of Signal Mountain's budget will be Monday at 6:30 p.m. There will be time for public comment before the vote.

East Ridge

Nothing has changed in East Ridge's proposed budget since the 30 cent property tax increase, $5 garbage increase and a 2 percent hotel/motel tax increase were first announced - despite the fact that a special workshop was called to look for cuts after citizens expressed wide disapproval of the increases at a June 9 meeting.

If approved, the property tax would become $1.42 per $100 of assessed value.

City Manager Tim Gobble said he wasn't surprised no cuts resulted from the meeting.

"We had already gone through the budget with a fine-tooth comb," he said. "It's a bare-bones budget."

Councilman Jim Bethune, who has opposed the hikes from the beginning, said he wasn't surprised either, noting that additional cuts never even had a chance.

"It's been cut and dry from the very beginning when they announced it," Bethune said. "It's been a 3 to 2 vote all the way, and I don't expect anything but a 3 to 2 vote tomorrow night. That's pretty obvious to everyone in town."

Mayor Brent Lambert, Vice Mayor Larry Sewell and Councilman Darwin Branam have been for the tax increase from the start, while Bethune and Councilman Denny Branam have been opposed.

City Council will vote on the final reading of the budget during their meeting at 6:30 p.m. today. There will be a time for public hearing beforehand.