Where's the utility tax?
July 3, 2008 · Updated 2:41 PM
An apparently peeved Councilwoman Sheilah Crider pointed out Tuesday night that her proposal to consider doing away with the citys current 6 percent utility tax wasnt on the agenda, as she had requested.
She made a motion last month and Councilman Paul Brewer seconded it to place the item on the March 4 agenda after the administration announced that the city wasnt in a financial emergency anymore.
Friday, City Administrator Thom Myers said that it was his fault the issue didnt get on the agenda. He said he has been doggedly working on the issue, but hadnt realized council members wanted to talk about it Tuesday.
Myers said he will argue against rescinding the tax, which generates more than $500,000 a year. Thats nearly 6 percent of the citys general fund budget.
Crider said she and other council members voted for the tax on the condition that it be rescinded when the citys financial emergency ended, which occurred last month.
Yet Myers said he watched video tapes of the council meetings in which the tax was discussed and found that wasnt precisely the case. He said council members passed the tax without conditions, but did so because there was a recognition that revenue streams were diminishing.
Getting rid of the tax will create an emergency, Myers said.
Myers said the city will be in the hole by nearly $600,000 if the council votes to kill the tax. Since the 2003 budget is based on very limited resources, Myers said the only way to make up the money would probably be to cut staff. It could mean laying off up to 11 staff members, he said.
The city council originally passed a 7 percent utility tax for 2000, but it expired at the end of the year. But then the city council passed a 6 percent utility tax at the end of 2001.
The city has been battling financial problems for about five years, though the formal financial emergency was finally called off last month. It started when former Mayor Steve Dernbach came into office and discovered the city was about $1 million in the red.
Then a series of statewide citizen initiatives caused the city to lose hundreds of thousands of dollars, as well as the ability to significantly raise taxes to make up for it at least without a public vote. To cut costs, Mayor Patty Cohen restructured the planning, building and engineering departments, reduced spending in every department and ordered a round of layoffs.
Cohen characterized the budgets for this year and next as maintenance budgets since they call for very little increase in spending.
The proposal to cut the utility tax will be on the March 18 agenda, according to Myers.