Looking at a $1.5 million shortfall in state and county sales tax collections this year, the Chattanooga City Council on Tuesday approved 11 ordinances increasing fees for more than 150 services and permits.
Councilman Manny Rico said desolate economic times did not prevent the council from raising fees on everything from fines for illegal parking to adult entertainment business permits.
“It’s never a good time – it’s just a need,” he said. “Revenues are down from sales tax and everything. We’re a service industry. That’s the only way we get our revenue to keep getting services to the people. You either cut out services or raise revenues like this.”
The fee increases require a vote after a second reading at next week’s meeting to become law.
The proposed increases include raising parking fines from $10 to $50 and adult entertainment licenses from $500 to $1,000.
City records show most of the fees hadn’t been updated since 1992. City Finance Director Daisy Madison said fee increases in the past “depended on our financial situation at the time.”
Councilwoman Carol Berz recommended a less arbitrary approach to adjusting city fees.
“I would like to have us take a more proactive instead of reactive approach,” she said. “Routinely we ought to review the fees and see if they make sense given the cost.”
Mr. Rico said the fee increases could create a revenue stream that could end up scrapping plans to raise property taxes.
City officials said last week most of those revenues would not come, though, until next year.
PDF: Ordinance worksheet for new revenuesPERMITS AFFECTEDSignsBuildingsHotel/motelAdult entertainmentElectricalFire DepartmentGasMechanical codeSpecial eventsParking finesPlumbing
“We never want to raise taxes, but we don’t want to cut any services,” Mr. Rico said. “We’re down to bare bones now.”
Councilman Peter Murphy made a motion that all permit increases related to contracting – building, electrical and other mechanical expenses – take effect July 1.
Roger Tuder, president and CEO of the Associated General Contractors of East Tennessee, said his organization did not get adequate notification from the city beforehand.
“We needed a heads-up,” Mr. Tuder said. “We can’t afford a 12 to 15 percent increase in fees in this economy right now.”
In other business, Councilman Andrae McGary asked for a discussion on an ordinance clause that would give preference to contractors and businesses that employ workers or resources within a 75-mile radius in the case of a tie bid. Mr. McGary, along with Councilman Russell Gilbert, will be out of town next week when it comes up for a vote.
Council members decided they will vote on the measure next week as scheduled.