Lookout Mountain freezing or raising taxes, depending on which side of the state line you're on

Lookout Mountain freezing or raising taxes, depending on which side of the state line you're on

June 27th, 2012 by Tim Omarzu in News

A crack in the public tennis courts in Lookout Mountain, Tenn., on Tuesday. The city is planning to use funds from a proposed tax increase to repair the courts, among other work.

Photo by Doug Strickland /Times Free Press.

Call it a tale of two cities' budgets.

On the Georgia side of Lookout Mountain, the City Council is poised to pass an austerity budget that will freeze property taxes and make numerous cuts. For example, the city will lay off two workers, eliminate employee raises for the first time in more than a decade and postpone sidewalk improvements.

"We wanted to create a balanced budget that would not include raising taxes -- and we accomplished that," Councilman Jim Sabourin said.

On the Tennessee side of the residential enclave, city leaders plan to increase property taxes by about 13 percent to fund things such as a 3 percent raise for employees and repairing the cracked surfaces of city tennis courts on Scenic Highway.

It's been eight years since Lookout Mountain, Tenn., last raised taxes, and residents haven't voiced objections, Town Consultant Dwight Montague said.

"The people who were at the commission meeting were like, 'Yeah, it's been eight years,'" Montague said, noting that the city's expenses haven't stayed static during that time.

"The town's been living with a very austere budget," he said.

Neither budget is official, yet.

On the Tennessee side, city commissioners won't approve their budget until mid-July after they learn what the city's share of the Hall income tax will be. It's a state tax on interest and dividends, a portion of which is passed on to communities in which the residents live.

Hall tax revenue varies from year to year, depending on the financial climate, but accounts for about 20 percent of the budget for Lookout Mountain, Tenn., officials said.

"So much of our income is dependent on that Hall tax," Montague said.

On the Georgia side, the City Council is due to give a second reading of its budget at 7:30 a.m. Tuesday, after which it will be official.

There's still a chance that the council eventually could seek a tax increase for a special purpose, namely, creating a new City Hall, police and fire station. The city is seeking requests for proposals for a new town center to replace the aging, cement-block City Hall building and should make a decision sometime this fall.

"We haven't crossed that bridge, yet," Sabourin said.

Contact staff writer Tim Omarzu at tomarzu@timesfreepress.com or 423-757-6651.