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Elizabethton City Council set to vote on 2019-20 budget, property tax increase, garbage fee increases

John Thompson • Updated Jun 12, 2019 at 9:23 PM

ELIZABETHTON — The Elizabethton City Council will meet tonight at City Hall to vote on the first of two readings on the proposed city budget for the new fiscal year.

The proposed budget is a result of nine workshop meetings held by the council in April and May.

The new budget includes a 6-cent increase in the city’s property tax rate, moving it to $1.85 per $100 of assessed value on real and personal property.

Most of the reason for the property tax increase was placed on the impending loss of state revenue from the ending of the Hall Income Tax. The state legislature has approved the gradual elimination of the tax over several years.

Elizabethton Finance Director Deborah Kessler said the peak revenue the city received from the Hall Income Tax came in 2016-17 fiscal year, when Elizabethton received $255,000 from the tax. Since then, Kessler said the amount received from the tax has steadily declined, dropping to $209,000 in 2017-18 and $140,000 in 2018-19, with $70,000 budgeted for next year.

During its recent workshops, the council determined the it would take an increase of 4 cents on the property tax rate to make up for the loss of revenue from the Hall Income Tax. That accounts for most of this year’s increase, but there is an additional 2 cents that has been included in order to do more paving on city streets. That would push the amount in the new budget for paving from $400,000 to $453,891.

One reason the council has relied on the property tax rate to replace the revenue from the Hall Income Tax is because the local option sales tax continues to be stagnant. While the economy continues to show growth and consumer spending continues to growth, it is not reflected in local sales tax revenue.

Kessler said despite the improving economy, the city has not seen a large increase in sales taxes. In the past four years, the annual revenue from sales taxes has barely grown: going from $3,869,000 in 2016-17; to $3,921,000 in 2017-18; to $3,924,000 in 2018-19 to $4,040,000 this fiscal year.

Mayor Curt Alexander blames the loss of sales tax revenues to two causes: the continuing growth of online retail sales and the attraction of new shopping centers in Bristol.

One other fee increase being considered by the council is an increase in residential garbage fees and bulk container garage fees. City staff is recommending an increase in the monthly fee for residential garage service, going from $10 per month to $13 per month. The recommendation for the pick up of dumpsters is an increase from the current $21.85 per pickup to $25 per pickup.The city has not raised the fee on bulk container service since 2005 and on residential service since 2012.

The fee increases would result in an increase in revenue of $185,498 for residential services for a year. The revenue increase for bulk containers would be about $80,000 per year.

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