Mayor Ralph Van Brocklin explains his motivation for recommending a 33-cent tax increase during a forum Monday afternoon. (Photos by Lee Talbert/Johnson City Press)
Johnson City Mayor Ralph Van Brocklin has proposed, at minimum, a 33-cent property tax rate increase for city residents.
He has done so with the full understanding that flying that flag will not likely increase his fan base, but he seems convinced the move may be necessary in fiscal 2015 to properly fund schools, to continue to invest in downtown and to stay on target with needed capital improvements.
The mayor and City Manager Pete Peterson laid it out in black and white early Monday at the Millennium Centre before a group of city and county leaders, school administrators and business owners.
At the bottom of the ledger looms a 52-to 60-cent hike.
This jump would help pay for a myriad of proposed cuts, including six police positions, the closure of Legion Street Pool, nixing the city’s contribution to the new farmer’s market, backing off downtown improvements and skipping scheduled capital equipment replacement.
Johnson City’s current property tax rate is $1.58 per $100 assessed value.
“It is not a surprise that we are looking at a budget that may need a tax increase to balance,” he said. “Although I did take a little heat for getting ahead of the City Commission on the propositions, the goals derived through our workshops do generally match what I’ve got in mind.
“But I’m only one of five commissioners. And based on what I’m hearing, don’t be surprised if there are multiple amendments proposed to this budget on first reading on June 19. We’ve done a damn good job of managing the budget. But without investment, we won’t be able to be the community in East Tennessee where you want your children to go to school.”
Two main areas account for the 33-cent increase.
Johnson City Schools faces a $3.1 million to $3.4 million deficit, and that is simply to maintain what was provided in fiscal 2014. If the system used its fund balance to cover these needs, school officials would be right back in front of commissioners next year asking for the same amount of funding with no reserves to fall back on.
Van Brocklin proposed 15 cents in new property tax revenue go toward this need beginning July 1.
He also suggested adding another 18 cents to cover a $2.5 million jump in city expenses and another $500,000 needed for capital improvement cost increases.
When the above-mentioned cuts are packaged with demands for continued storm water improvements, property upkeep, sidewalk construction, paving concerns, walking paths and trails, and appearance and safety issues, the proposed rate hike jumps to between 52 and 60 cents.
The mayor, a former Board of Education member and ardent supporter of education in particular, said Johnson City Schools’ budget is 80- to 85-percent driven by personnel costs. He said he understood the BOE’s position that they need to promote salary increases to keep them in the top 10 in the state.
However, he said as compensation continues to escalate, it makes it difficult to accommodate within a municipal budget. He asked that the BOE keep the step increases to what the state will fund and consider how salary increase affects municipal revenue, which has been flat or negative.
Van Brocklin said if he promotes an amendment for a tax increase, the amount would be clearly specified with defined portions going to specific purposes that commissioners can then choose to support or not support.
“I believe that it is true that if we squander the taxpayers’ money, we deserve their scorn,” he said. “But make no mistake, timidity that results in the lack of investment — or worse, that fails to allow even a maintenance of current services — merits its fair share of scorn, as well.”
Peterson said the 2015 budget includes expenditures of about $204 million and a proposed general fund of roughly $76 million. He said he expects the city to end FY 2015 with a $14.7 million fund balance. However, if commissioners decide to dip into this reserve, it must not go any lower than $12.6 million.
“At that point, we’re at the minimum and it can affect our credit rating,” Peterson said. “We are at a point and time where we need to decide what our values are. It’s your community. It doesn’t belong to five commissioners or the city staff.”
Peterson said a 50-cent increase for a home valued at $200,000 would increase the current payment by $21 a month, or $252 a year. He also reminded attendees it has been 12 years since the last property tax hike and that increase has been the only one in 20 years.
“We’re prepared to make it work without any additional revenue,” he said. “Sales tax is not flat folks, it’s going backwards. Without needed revenue this coming year we will eliminate 13 positions, the Senior Services Director position will not be funded, there will be no new sidewalk construction, special appropriations will be dropped, as will the televising of the commission meetings.”
Commissioners do have several options. According to Van Brocklin they can:
• Accept the budget as proposed.
• Restore some or all of the cuts — with or without a tax increase — understanding that corresponding cuts of equal magnitude must be identified; equal cost-saving measures must be identified; additional sources of revenue must be approved, or a combination.
• Restore some or all cuts with or without an increased allocation to schools, and implement a property tax increase.
• Restore some or all cuts and add the city operating cost increase, with or without and increased allocation to schools, and implement a property tax increase.
• Restore some or all cuts and add funding to achieve specific City Commission goals, with or without an increased allocation to schools, and implement a property tax.
These and other methods are what commissioners will be raking through at two scheduled workshops this week. Van Brocklin dubbed them “analytical sessions” for a good reason.
No other commissioners attended Monday’s presentation. They meet Wednesday at 5:30 p.m. and Thursday at 3 p.m. in the Municipal & Safety Building. A first reading of the budget ordinance is set for June 19.
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