The City Council’s difficult search for a fair budget and its agonizing debate over whether, and how much, to increase the property tax rate finally ended Tuesday evening as it had to: with a majority vote for a tax increase. At 37 cents, it is far less than the 64-cents Mayor Ron Littlefield originally requested, yet still more than most council members would have preferred. The council’s 6-3 vote reflects the majority’s correct judgment that it would be irresponsible to have an operating budget continue in the red for a fourth year, or to allow further shrinkage in public services, especially for the police and fire departments.
It took some backbone for the council to come to this decision. With the economic recovery still hobbled by troubling joblessness, wages still frozen for many, and a backlash against government spending still leading national newscasts, council members have been visibly concerned about the burden of a tax increase — regardless of the fact that it’s the first hike in eight years.
Indeed, dozens of anti-tax protesters — a tiny fraction relative to the city’s population but still a potent symbol of public opposition — turned out for the council’s Tuesday night meeting, as they have for previous meetings. Council members nevertheless assumed their responsibility to fix both a balanced budget, and one that is in the city’s larger long-term interest.
The $185 million budget is not generous. For the second consecutive year, for example, it does not provide for general employee pay increases. The only increases it allows are for limited structural reasons in certain police department job categories. It provides for only one police academy, not the two that would be necessary to add sufficient officers to offset expected retirements and to raise the base level of officers substantively above the current minimal number.
It does not continue city health-insurance coverage for retirees beyond the age of 65, and it eliminates coverage for early retirement for new hires. It no longer allows police officers who live outside the city to take city vehicles home. It also cuts, to $1 million, city contributions to funded social service agencies.
The budget does, however, allow the city to quit making up its annual operating budget by drawing down the city’s contingency reserves. That’s crucial: It helps the city keep its double-A credit rating, which allows it lower interest rates on the city’s bond funding for capital investments in infrastructure. The city’s reserves, rebuilt by former Mayor Bob Corker from $24 million to around $50 million, had fallen in recent years from $41 million to $24 million, which is about as low as the city can go without risking a downgrade on its credit rating for new bond issues.
The new balanced budget will also allow the city’s parks and recreation centers and swimming pools to quit reduced-hour workdays and return to full days and regular programs. In some urban neighborhoods that’s a particularly important service to give adolescents constructive activities.
In fact, the new budget, which still must be approved on second and final readings next week, could be classified mainly as a placeholder. It keeps public works and agencies from sliding off the budget chart. But with no raises and little flexibility for improving services, it remains stingy and cramped.
If city residents want something better, they must accept, and help promote, a more regular pattern of smaller, periodic tax adjustments to keep the city’s budget commensurate with rising prices in goods and services, and capable of retaining quality employees and necessary city investments in infrastructure. As it stands now, the city is still falling behind in each of these areas, even as city residents are paying double to county government for services that the county does not provide in the city.
Until the Hamilton County Commission fixes the unfair tax problem it has created, city taxpayers will continue to be scammed by county government. That is where the protest over unfair property taxes should begin — not at city hall.