CLEVELAND, Tenn. - The Cleveland City Council rejected a proposed 31/2 cent property tax increase Monday.
Councilmen George Poe, Charlie McKenzie, Richard Banks, David May and Dale Hughes voted against the increase, while Bill Estes and Avery Johnson voted in favor.
The increase would have been equivalent to an additional $8.75 a year on a home valued at $100,000, according to the city staff.
After the vote, City Manager Janice Casteel made her case for a 2011-12 budget that included the extra 31/2 cents. But because there will be no increase, she told the council, "I need you to make some cuts."
Without the tax increase, she said, there will be no raises for city or Cleveland Utilities employees. The Cleveland Utilities budget, which is part of the city's budget, still includes a 5 percent increase for both water and sewer services.
The council did not vote on the budget, deciding to wait until June 15 for the first of two required votes. In the meantime, council members must decide how to cut the proposed budget or amend it.
"I think this is too important to vote today," Mayor Tom Rowland said.
To have a budget in place by July 1, when the new budget year begins, the council must take a second vote at the end of June.
Voting against the tax increase will cause problems, Johnson warned.
"We have done a lot of hard work to get people looking at Cleveland," he said. "We don't realize what a roadblock we are building for ourselves."
Without city matching funds, which could be generated through the tax increase, federal grant money could be lost for transportation projects, he said.
But sales tax revenues have taken a turn for the better, Poe said.
"If we see a trend, we can still catch up, later," he said.
It was Hughes' first council meeting since being appointed last week to fill a vacancy.
"I want Cleveland to be progressive. I want to see our city grow," Hughes said. "But at this point, I don't feel comfortable voting for a tax increase."
Contact Randall Higgins at email@example.com or 423-314-1029.