Signal Mountain Town Council members are moving forward with a revised version of the town's 2019-20 budget which includes a tax increase of 21.3%, down from the previously proposed 22.7% increase.
Mayor Dan Landrum, Councilwoman Susannah Murdock and Councilman Bill Lusk voted to pass the budget on first reading at their June 10 meeting, which Vice Mayor Amy Speek could not attend because of a family emergency. Councilman Bob Spalding abstained, explaining that he wanted to wait until after the public hearing for the budget is held before the second reading at the council's June 24 meeting.
If the new budget passes, the property tax rate would go up by about 33 cents, from 1.5665 to 1.9004 per $100 of assessed value. On a $300,000 home, the approximate median home value in the town, that would mean $250 more in taxes for the year, or $22 a month.
The new budget does not include a sanitation fee, which Town Manager Boyd Veal had suggested in his recommended budget as an alternative to raising taxes. If citizens were charged a fee of about $18 a month, it would have addressed the town's $700,000 revenue shortfall.
On initial discussion, councilors decided against the fee due to its regressive nature, with the smallest houses paying the same as the largest houses.
At their most recent budget work session, they discussed charging a $9-a-month fee to partially fund sanitation services, with the remainder covered by property taxes. They again decided against it, since residents of homes valued at less than about $320,000 would pay end up paying more, once both property taxes and the fee were calculated,than they would with the property tax increase.
The new budget includes the full 5% raise for town employees aside from Veal, who did not include himself in the 5% employee raise in his original, recommended budget. Councilors had discussed adding a 5% raise for Veal into the equation. They also considered reducing the pay raise to 2.5%, without a raise for Veal.
The new budget also includes about $270,000 worth of paving, the only expenditure that was not in Veal's recommended budget.
Councilors had previously proposed adding $338,000 worth of paving, which they deemed necessary because the town did not do any paving last year and wet weather caused deterioration to some of the town's roads, said Landrum.
Reducing the amount allocated for paving alleviated the tax burden without leaving the town with a revenue shortfall next year, provided the town's total budget remains the same for fiscal year 2020-21, Landrum said.
"I'm happy to see a compromise," said Murdock. "I think it's so important to compensate our employees commensurate with what other municipalities pay to the best of our ability. ... I also think it's really important to forecast [the town's future financial situation]."
Email Emily Crisman at ecrisman@timesfreepress.com.