Tax pitch finds no consensus

Tax pitch finds no consensus

June 23rd, 2010 by Cliff Hightower in Politics Local

Mayor Ron Littlefield suggested cutting his proposed property tax increase Tuesday by 25 cents, bringing the hike to 39 cents per $100 of assessed value.

"It brings it down from 64 cents," Mr. Littlefield told council members.

He said he believed the cuts necessary to have only a 39-cent increase would be "painful and not in the best interests of the community."

But City Council members reached no agreement Tuesday on whether the new property tax hike is too low or too high. Councilwoman Deborah Scott said she still could not stomach the proposal.

Staff Photo by Dan Henry Mayor Ron Littlefield presents the Chattanooga City Budget.

"I think it is still too rich for what we can afford right now," she said.

The City Council has been debating for a month the city's proposed budget for the 2010-2011 fiscal year, which begins July 1. Mr. Littlefield initially proposed a property tax increase of 64 cents per $100 of assessed value.

But council members since have said they would not approve the $198.6 million budget.

The budget proposed Tuesday would bring total expenditures to $187 million. There still would be a $19 million shortfall, records show.

Mr. Littlefield achieved the cuts by taking away retiree benefits for city employees 65 years or older and for those who retire before they reach age 55. The proposed budget also included no employee raises, except to fix a police anomaly, cutting workers in Public Works, Neighborhood Services and Parks and Recreation.

It also included not hiring more firefighters and either shutting down the Eastdale fire hall or shifting firefighters to other stations. Mr. Littlefield also proposed only having one police academy, or possibly two if a federal COPS grant is approved.

Other cuts included leaving recreation centers at their current decreased hours of operation, closing down the Frances Wyatt Recreation Center in North Chattanooga and shutting down the Carver Recreation Center pool off North Orchard Knob Avenue, records show.

WHERE TO CUT

But council members still were torn Tuesday about how, where and how much to cut. Councilman Russell Gilbert said he wanted to see employees get raises, expressed dissatisfaction at recreation centers not having their hours extended and said cuts could be found elsewhere.

He said he thought those savings could be found within the city's capital budget.

"We spend more money on capital (expenditures) than anything else," he said.

City officials, however, said the capital budget is entirely different than the city's operational budget. Dan Johnson, chief of staff for Mr. Littlefield, said the only money that comes from the city's general fund to pay for capital projects is used to pay debt for bonds.

"The only connection is that we have to take out money there to pay for debt over here," Mr. Johnson said.

At one point, Councilman Jack Benson asked for a consensus vote to be taken from council members, saying they thought the mayor's budget was a good start and agreed not to raise taxes above 39 cents.

The motion died as council members debated whether they agreed with the proposal.

COMING SUNDAY

Read about other issues city officials face as they craft the budget.


BY THE NUMBERS

Current budget (64 cent property tax increase):

* $166 million -- Estimated revenues

* $198 million -- Estimate expenditures

* $32 million -- Shortfall

Alternate budget (39 cent property tax increase):

* $166 million -- Estimated revenues

* $187 million -- Estimate expenditures

* $19 million -- Shortfall

Source: City of Chattanooga

One of the largest changes in the mayor's new proposal was in employee wages and benefits. City officials estimated they could save $7 million.

"This is really the only place where we saved money," Mr. Benson said. "You know that? We're going to have to come to grips with that."

DEPARTMENTS REACT

Larry Zehnder, the city's Parks and Recreation director, said Tuesday the cuts could have been greater.

"Anytime we take away a service it's disheartening," he said.

The Carver Recreational Center pool had about 1,700 people come through its doors last summer, and it netted $3,188 in revenue, Mr. Zehnder said. The Frances Wyatt Recreation Center saw about 18,000 visitors come through its doors, he said.

He said both facilities are on the low end of visitation as far as recreational centers.

Councilman Pam Ladd said she had some concerns about implementing a change in retiree medical benefits for those who have not reached age 55. That could hurt police ranks, as many officers retire at a younger age, she said.

Fire Chief Randy Parker said shutting down a fire hall could affect the city's fire insurance rating. He said his preference would be transferring people from companies to those that need more people.

"You're short-staffing companies all over the place if you do that," he said.

Councilman Carol Berz said the council would meet again today to talk about city-funded agencies and cuts.

"My goal is to have the first reading by Tuesday," she said.

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