Council: pass tax bump, but only temporarily?

kjahner@newsobserver.comMay 23, 2014 

— Unable to agree on an acceptable budget without it, Garner’s town council decided to consider going forward with a one-cent tax increase with the caveat of their intention to make it temporary.

Staff recommended the increase to deal with increasing emergency services costs. Under the proposal it would become part of – rather than an addition to – next year’s planned 2.75-cent tax increase approved by voters as part of the bond referendum. That means next year the town would target an increase of only 1.75 cents per $100.

Enough revenue growth in 2015-16 might allow such a maneuver. But concerns remain that the budget still would remain too tight next year. Staff might still feel compelled to recommend a full 2.75-cent increase next year anyway; that money had been slated specifically for bond payment, not to help cover three new firefighters among other emergency service needs.

“It’s fresh so we haven’t had a whole lot of time to process it,” Town Manager Hardin Watkins said after the Tuesday meeting. “Growth is coming; it’s how fast and how quickly.”

A total of 2.75 cents (per $100 of valuation) would represent a 5.6 percent increase in the property tax, or about $47 on the average home ($170,000) in Garner. Another cent would add another $17. The bump to either 51.75 cents or 52.75 cents would still keep the rate below the 2007 rate of 57.9 cents that was dropped after a 2008 county-wide property revaluation.

Council members, Buck Kennedy in particular, have hoped to find a way to avoid needing the early tax increase, but even Kennedy acknowledged that making this year’s budget fit without it presented difficult choices.

He said he doesn’t oppose the tax increase outright but wanted to see all options on the table before deciding. He also said that “every time I took a step” toward finding money to negate the tax increase, he’d learn more “and say ‘that’s not it.’”

Aside from growth, the town hopes biting the bullet on equipment costs like police radios with a tax hike this year will lend flexibility going forward. Councilman Gra Singleton noted that many of the items the tax addresses such as future firemen would not go away, but he also said the idea would help clear some necessary costs, lending future flexibility.

“You look at it any way you want,” Singleton said of framing the hike. “It would get us prepared and get some of this equipment stuff off the table.”

Paying for fire protection

But Singleton also noted that fire service costs could continue to increase. He noted that other towns pay substantially more than Garner, saying “we’re getting a steal.” The town will pay for six months of three new firefighters in 2014-15 according to the plan, and that cost will grow in subsequent years. The county pays 46 percent of the Garner Fire and Rescue budget, but effectively that figure has lowered as the county refuses to expand on items the town regards as necessary. In-town need consumes a significant majority of the fire agency’s time and resources.

Councilman Ken Marshburn, who has generally supported the staff assessment regarding the need for the tax, said the effort to increase the tax but keep the overall increase at 2.75 represented a fair compromise.

“The main concern I have is the impact it’s going to have one year from now. If we can bridge it with one cent and make it work with the increase we would have had, it would be worth a try,” Marshburn said.

Town staff will consult Davenport & Company, the financial firm that advises the town on bond and financial matters. Staff and elected officials will discuss the idea further at the May 27 work session after time for consideration and analysis. The town hopes to pass a budget with at least a couple weeks to spare before the July 1 beginning of the 2014-15 fiscal year.

Despite clinging to the need for a tax increase that will net an estimated $297,000, during the process of trying to negate it staff has managed to trim about $42,000 from the budget that it feels it can and should save anyway. Those cuts in spending include alterations in the town staff reorganization plan ($19,000), reduction in contracted legal services related to the Google Fiber program ($10,000), changes in the approved retirement rate for police ($5,700), and a few other minor changes. That money will end up in the fund balance, barring any unforeseen expenses or revenue shortages.

Jahner: 919-829-4822; Twitter: @garnercleveland

Garner-Cleveland Record is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service