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Council debates tax cut
By BLAINE CRIMMINS, bcrimmins@acnpapers.com
Facing a reduction in property tax revenue for the next fiscal year, The Colony City Council is crunching the numbers as it prepares to approve the 2010-11 budget.
Finance Director Rebecca Lai gave the council its first formal presentation of the proposed budget at Monday’s regular council meeting. City staff members have been working toward a zero balance budget, with expenditures equal to revenue.
Though not as drastic as other cities in the area, The Colony has had to make sacrifices in order to achieve its goals. Among other inter-department cuts and previous staff reductions, the new budget proposes a decrease in the cost-of-living adjustments for retirees as well as reductions in health insurance coverage for city staff.
With that in mind, Council member Allen Harris is reconsidering the council’s intention to lower the tax rate a quarter-cent. The proposed budget includes a decrease in the tax rate from $0.688 per $100 valuation to $0.6855, equaling $409,362 in total revenue reductions, or $3.81 in savings per household. The average home value in The Colony is $152,548.
“My philosophy hasn’t been to lower taxes at all costs and to drive it down, but to provide profit-sharing. If we’re making money we definitely share that with the residents,” Harris said. “Last year we had positive revenues and we went down .2-cents. This year we have negative revenues and we’re going down .25-cents. That doesn’t make a lot of sense when we have issues with insurance and with not providing (cost-of-living adjustments) to staff. … A quarter-cent, at this point in time, looks more like symbolism over substance.”
On the other hand, Council member Jeff Connelly took issue with the perception that a tax cut only equals $3.81 per household. He said he believes in an economic approach in which a lower tax rate increases revenue by attracting residents and new development.
“Conservatives like me believe wholeheartedly … that you find the equilibrium point with your tax rates and you’ll generate more revenue and be able do more things,” he said. Regarding dollars per household, “Let’s not devalue what that means as far as competition goes and our ability to create more revenue in the future,” Connelly added.
Mayor Joe McCourry said he thought the council should follow through with its intention to continue incrementally lowering the tax rate this year and beyond.
After the last election, “we set out … to head in a specific direction,” McCourry said. “This is bigger than any $3. It’s a commitment on us to continue where we’re going and stick to what our original guiding goals were for this three-year period of time. We can do it.”
Council members Kirk Mikulec and Richard Boyer voiced agreement with McCourry and Connelly.
“If we look at the ad valorem tax rate in a vacuum, it’s a small (amount),” Boyer said. “But it’s an entire attitude and approach to the way the city is run. It’s the one of the reasons I’m up here.”
A public hearing on the budget is scheduled for 7 p.m. Aug. 17 while a hearing on the tax rate is scheduled for 7 p.m. Sept. 7. The budget will be officially approved on Sept. 21, taking effect Oct. 1. The council will continue to discuss the budget during work sessions an hour before each regular meeting through the end of next month.
In other business on Monday, the council approved a resolution directing publication of the city’s intention to issue certificates of obligation not to exceed $3.5 million to fund capital improvement projects, including six new police cars, an ambulance, a parking lot for Lions Club Park, and upgrades to the city’s water infrastructure and public services building.
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