The town of Signal Mountain may see a 22% tax increase if town councilors don’t come up with another solution to bring in more revenue during their third budget work session, which is scheduled for May 28 at 6:30 p.m. at Town Hall.
Fiscal year 2019-2020’s proposed general fund budget of $8,874,000 is a decrease from last year’s nearly $10 million. Last year’s budget included several capital projects, such as the resurfacing of James Boulevard and the rehabilitation of the Mountain Arts Community Center, and required a significant pull from the town’s fund balance, explained Town Manager Boyd Veal.
He said the fund balance fluctuates, but he projects to finish the year with $3.4 million, a little more than what is needed for the town’s policy to maintain a fund balance of 35% of its budget.
The two main factors affecting this year’s budget are the revenue the town is losing with the state phase-out of the Hall Tax, and the personnel costs for the town’s new fire station. Together, those two factors have a $1,330,000 impact on the town’s budget, and $700,000 of that is not addressed in the proposed budget, said Veal.
To raise that $700,000, he suggested a sanitation fee of about $18 a month per household for costs associated with those operations, which are currently paid for with property tax revenue. Other municipalities such as Red Bank charge a sanitation fee.
The council decided against that option because of the regressive nature of the fee, with the smallest houses paying the same amount as the largest houses.
The proposed budget, as amended following the council’s second budget work session held May 7, would raise the town’s property tax rate from 1.5665 to 1.9218 per $100 of assessed value. That would mean an extra $1,045,510 annually for the town, and an additional $266.48 in yearly taxes on a $300,000 home.
About $700,000 of that additional revenue would go toward the town’s Sanitation Department expenses, and $338,000 to street paving.
The remaining $7,510 would go toward a 5% increase in employee salaries, including that of the town manager, whom councilors chose to add as Veal did not include himself in the 5% pay raise in his recommended budget. All town employees received a 2.5% raise last year. That $7,510 also includes a council-added $1 an hour pay raise for police officer Troy Kennedy, who trained to provide information technology services to the department so an outside consultant did not need to be hired.
Though, councilors were split on the tax increase.
Councilman Bob Spalding, who did not attend the first two budget work sessions, said the LUCAS chest compression device requested by Fire Chief Eric Mitchell would need to be included in the budget before he could support such a large tax hike.
Vice Mayor Amy Speek, who did not attend the second budget work session, said she supports funding Police Chief Mike Williams’ request to hire an additional police officer, which is not included in the proposed budget. She said she wanted to speak to Walden officials about helping to cover the cost of the officer, as SMPD has reported a 165% increase in calls to Walden over the past year.
“One of the most important things that I appreciate in living on Signal is the safety of Signal,” she said. “We can’t maintain that if we’re stretching our resources.”
Veal, the former chief of Signal Mountain’s police department, said the town has had several meetings with Walden on the subject. He explained that Walden is served by the Hamilton County Sheriff’s Office, and one of the reasons SMPD offers mutual aid to the sheriff’s department on a day-to-day basis is because that department provides aid to SMPD when something big happens or a specialized skill is needed that it doesn’t make sense for such a small department to train and pay someone to do.
Resident Chris Cole said he is retired military and appreciates the town’s services, but the cost of a 22% tax increase far exceeds any cost of living increase that anyone on a fixed income would receive.
Denise Thomas also spoke against the tax increase at the council’s May 13 meeting.
“I understand that we’re building homes and things are growing up here, but our family is maxed out pretty much,” she said. ” … We pay county taxes, we pay city taxes. And if I’m correct, I think Hamilton County taxes are going up. Water is about to go up … That’s a lot of increase for a family of four.”
But not everyone felt raising taxes was a poor solution to the town’s revenue shortfall.
“If we’re not willing to cut services, we have to increase revenue. There are not a lot of ways for us to do that,” said Anne Hagood, adding that selling off town assets (such as the water system) rather than raising taxes is like selling one’s home to pay off credit card debt. “Your credit card debt exists because you were spending more than you had coming in, and robbing Peter to pay Paul doesn’t solve the problem.
” … When you’ve used up all the money from the sale of your house, you’re right back into a financial hole because you didn’t balance your budget, and you no longer own that house.”
Email Emily Crisman at ecrisman@timesfreepress.com.