Decrease the Property Tax Rate?
Yesterday Asheville City held one of three budget work sessions to prepare for the Fiscal Year 2017/18 operating and capital improvements budget. The big question was whether or not the City would be increasing the property tax rate due to the significant city-wide property revaluation increases of 25% or more that property owners recently received.
As you know, the City approved a $74 million bond last November which the City said would require a property tax increase to pay the debt and principal.
Barbara Whitehorn, the City's Financial Director ($157,000 in salary & benefits), said the City could actually lower the property tax rate to .395 (3.95 cents), meaning at that rate, the city would be "revenue-neutral." Revenue neutral means the City could receive the same amount of money without having to increase taxes and could cover it's annual budget.
The Bond needs 3.5 cents
However, in order to implement the $74 million bond and pay for its debt service, it would require a little over 3.5 cents to be added so then we're back at around 4.25 cent property tax rate. The City's current tax rate is 4.75 cents (or as most of are used to seeing it, .475) which means the City could still slightly lower the property tax rate... something that has not been done in years.
Don't go celebrating yet. There are new projects that various constituents and council members wish to implement which could both eat up the extra funds and/or require additional tax rate increases either leaving us at our current rate or increasing the tax rate.
- Transit Master Plan
- Energy Innovation Task Force recommendations
- Downtown Safety Plan
- Facilities Master Plan
- Downtown Sanitation Improvement Plan
Councilwoman Julie Mayfield made a lengthy presentation about the Energy Innovation Task Force and their recommendations to spend roughly 1.1 million of which $50,000 would go toward marketing and the rest toward weatherization for low income households. This met with support from Councilman Cecil Bothwell and Councilman Keith Young.
While all of this will go forward to round 2 of the budget work session meetings (next one March 28th and then April 11th) wherein they will discuss specifics of the operating and capital improvement budget respectively, it's not yet decided what the Council will do. Given their propensity to spend, we're betting these initiatives will go forward.
Oddly, Councilman Gordon Smith and Mayor Manheimer cautioned against increasing property tax rates and wanted close scrutiny of these new projects. Gordon Smith (who is not running again this year) was concerned about the potential loss of federal funds (2 million and more) and Mayor Manheimer (who is running for re-election) was concerned about public outcry because taxpayers will still see an increase in their tax bill even if the tax rate is lowered because the property revaluations came in so high. While Gordon Smith is now fiscally concerned, we should all be concerned and ask our Council to be cautious and lower the tax rate.