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City Council confronts ‘challenging’ tax hike in budget

City Council began Thursday night to tackle a “challenging” tax-hike proposed budget of $27.2 million.

Mayor Gabriel J. Campana has proposed a real estate tax increase of 0.65-mills that council appeared poised to adjust higher.

The city financial picture is one that starts out with a $1.5 million deficit and a slightly more than $107,000 in year-end balance or the city savings account, Campana said.

Under Campana’s proposed budget, the millage would go from 14.72 to 15.37 mills, but that could increase in the adopted budget based on the late-night discussion as council tabled that proposed tax rate to discuss it further.

As proposed, a property owner with a house assessed at $100,000 would pay about $1,500 a year in city taxes. That can be adjusted a bit higher based on the assessment, said William E. Nichols Jr., city finance director.

Any proposed tax hike is expected to beef up the drained reserve, which had been at $107,497.

Troubled by that low amount of a savings, council also took some late-night action to increase the end balance.

For example, after reviewing an estimated 2 percent in economic growth, council took $267,000 out of the real estate tax income estimate, so as not to inflate assumptions.

The proposed budget cuts out seven jobs, all through attrition, which means retirements or not filling vacant positions, Nichols said.

“No layoffs,” Campana said, but the police complement at 47 officers, with a budgeted 51 officers in 2018, beginning the year with fewer officers than 2018.

River Valley Transit also was set to add $77,500 toward the end goal to assist the finance picture. Council also appeared prepared to pull a sale of Elm Park estimated at $100,000 out of the proposed budget at press time.

The city might also add $50,000 a year for the next five years as part of a match for a state Redevelopment Assistance Capital Projects grant for Bowman Field upgrades.

Not all on council were prepared to pass the budget on first reading.

Councilman Derek Slaughter was highly critical of the figures presented by the administration.

Slaughter said he would not vote on a budget that he said required more work sessions, after the traditional two occurred the week after Thanksgiving.

It’s the spending plan that Slaughter asserted had contained inflated estimates and inaccurate line items.

“We all can do simple math,” Slaughter, a math teacher, said. “It is difficult to support in advance a budget with such gross inaccuracies that need addressed,” he said. “It is not ready to move forward in its current form.”

The overall picture of the city’s financial health with taxpayers funding salaries and benefits for professional police, firefighters and others in unions remains a steep climb.

A three-year city financial plan contains a trending outlook indicating $26.4 million needed for salary/benefits items next year; $27.1 million in 2020 and $27.9 million in 2021, Councilman Randall J. Allison said.

These are salaries, benefits, pensions, comp time, overtime and federal insurance contributions tax, according to Council President Jonathan Williamson.

“We’ve been deficit-spending every year,” Williamson said.

The city has reached a stage that without tax increases each year and without cuts in services and staff, the problem will compound itself over the next three years, Nichols’ finance plan indicates, Williamson said.

“Not sure the 0.65 mills is going to do it,” Councilman Joel Henderson said.

Henderson said it appeared necessary for more of a tax increase.

It was likely the council was moving closer toward the three year- finance plan proposed a need for a 0.75 mills increase in the 2019 budget.

Council will hold a final reading of the proposed budget next Thursday.

Outside of the council chambers, Campana seemed also to see a need to have a leaner government next year and is confident in the financial plan presented to council.

“I have faith in my finance director,” Campana said.

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