Tax increases are never popular but are sometimes necessary – that is the sentiment driving Collegedale commissioners’ recent approval of a 22-cent tax increase.
“[The library] is the only reason I’d be willing to vote for a tax increase,” said Commissioner Katie Lamb. “I know the library has been pushed on us, but I’m a firm believer in keeping the library. I think it would be a mistake for the city not to have a library.”
The library will remain open pending final approval of the budget June 20, when citizens will also have a chance to comment. A representative from Library Systems and Services Inc., with which the city is negotiating outsourcing management of the library, is expected to present a plan that evening as well.
The budget passed unanimously on first reading, but it was not popular even with all the commissioners. The absent Vice Mayor Tim Johnson sent in a letter that was read before the vote that detailed his issues with some of the included measures and proposed around $222,000 worth of cuts.
“A 22-cent property tax increase is not acceptable in this time of hardship,” he wrote. “As of May 31, 2011, housing values dropped to 32.7 percent. That’s worse than the Great Depression, when housing values dropped to 31.2 percent. The unemployment rate saw a 1.8-percent increase with a shockingly weak job market.”
Johnson also noted that the city will already be getting additional revenue in the form of incorrectly distributed local option sales taxes. Collegedale will receive $492,000 spread over the course of one year to make up for one year of lost revenues. City Manager Ted Rogers said the problem has likely been going on for a while, but this is standard procedure in such instances, which are more common than one might think.
“That actually kept this tax increase lower than what was proposed,” Rogers said. “Even with the cuts the vice mayor came up with, we’d still need a tax increase to fund the library.”
Rogers plans to bank some of the additional money in order to shore up reserves, which are currently only around $200,000. With the total cost of the library still unknown at this point, the city could have to cut services both at the library and throughout the city, Rogers said.
The Tennessee Comptroller of the Treasury recommends that cities have at least 17 percent of their overall budget in reserves, which should be enough to operate the city for two months without additional cash flow, according to Rogers. The city’s overall budget this year is proposed at more than $7 million.
“The principle is spend some, save some,” Rogers said of his budget approach. “You have to have a proper reserve and proper spending; you have to have balance. A lot of the things we’re capitalizing on are one-time events. When you have one swipe at it you’re trying to get the best swipe you can. I believe this budget is extremely fiscally responsible both in the short term, midterm and long term.”