The Dalton City Council on Tuesday approved a 3.3 percent reduction in city taxes, making good on a promise to bring the city’s tax rate down.
The cut amounts to a 9 percent reduction in city income, or $955,000 less money in city coffers.
Leaders say the cuts were possible because Dalton reduced manpower by about 20 percent three years ago. The city also has practiced conservative budgeting since then, officials said.
Dalton also overestimated the impact of declining property values and the new Freeport Exemption, said Cindy Jackson, the city’s finance director.
This year, Whitfield County voters approved the Freeport Exemption – a 20 percent tax exemption on certain inventory goods held in warehouse space.
“We had anticipated a much larger decrease in revenue,” Jackson said.
Dalton has been hard hit by home foreclosures and property values have slipped.
Mayor David Pennington, who took office in 2008, said cutting taxes was a promise he made on the campaign trail. City leaders are looking for ways to make even more cuts for the 2011 fiscal year, he said.
“We were taxing too much when I became mayor,” Pennington said. “I campaigned on a promise to cut the tax rate.”
There are challenges ahead in making more cuts, Jackson said. The city already made cuts in 2008 and 2009 and may see a 10 percent increase in costs associated with its defined benefits retirement plan, Jackson said.