East Ridge City Council will vote on the first reading of their 2013 fiscal year budget on Thursday.
After a marathon meeting and seesawing over votes, East Ridge city officials voted Monday to repeal a recently passed ordinance allowing the city to collect its own property taxes, and to consider doing away with the city's sanitation fee and raising property taxes instead.
The property tax hike, if passed, is a move City Manager Tim Gobble repeatedly described as "revenue-neutral." Residents would see a significant decrease on their water bills as the city's sanitation fee is cut, and would see their property tax bill go up concurrently.
The tax raise would bring the city's current rate 44 cents up -- from $1.42 per $100 of assessed property to $1.86.
The switch isn't exactly an even swap. For the majority of East Ridge citizens, the tax increase will actually save them money on the outset, Gobble explained.
Each household that currently pays a water bill now pays $180 a year for East Ridge's sanitation fees. With the tax adjustment, homes valued under $165,000 would pay less in taxes than what they are currently paying with the current sanitation fee, according to figures from Gobble.
The 2010 census shows that the median home price in East Ridge is $118,000.
The forced decision over the fee comes after Tennessee American Water decided to stop billing services for municipalities' sewer and garbage fees.
Red Bank is considering a similar tax increase as East Ridge's as they head into budget season. Some cities -- like Collegedale -- already have the sanitation fee included in their property taxes, according to Hamilton County Trustee Bill Hullander.
"There's no easy way with this," said Councilman Jim Bethune, who added that he was worried about misleading headlines in the newspaper reading "East Ridge raises taxes."
Denny Manning was vehemently opposed to a possible increase.
"This is a tax increase, no matter how you word it, no matter how you dress it up," Manning argued.
Mayor Brent Lambert -- who said the switch would technically lower his own taxes -- said "morally" he had to vote against it for that very reason.
Lambert and Manning voted against considering an increase, while Sewell and Branam voted for it.
Bethune initially voted against it, then asked the council if they could reconsider the motion and changed his vote to align with Councilman Larry Sewell and Branam's.
The decision only directs how Gobble is to amend the 2013 budget. The first reading of the new budget -- which will include the tax adjustment -- will be voted on Thursday evening.
At the beginning of the meeting, the council also voted to repeal a recently passed ordinance that would allow the city to collect its own taxes.
The resolution, unanimously passed April 12, came under fire after Hullander -- whose office has traditionally collected the city's taxes -- questioned officials whether they knew the scope of the undertaking in East Ridge.
Bethune and Manning argued that the counsel had not received enough information on the outset about all the hassle and money tax collecting would involve, and that it could end up costing the city more than it would save.
"If it ain't broke, don't fix it," said Manning.
Branam and Lambert voted for the city to keep the tax collecting ordinance, while Bethune and Manning loudly voted no. Sewell took a long pause, then voted to repeal.