It appears the consensus is to raise the city’s property tax rate by 6 cents per $100 off assessed value. That would put the city’s property tax rate next year at $1.85. City residents also pay the Carter County tax rate of $2.47, which brings the combined property tax rate to $4.32 per $100 of assessed value. Council members said the 6-cent increase would amount to an additional $15 in taxes for someone who owns a $100,000 house.
The councilmen gave two reasons for the tax increase. Four cents of the increase is to replace the revenue lost by the elimination of an entire revenue stream, the Hall Income Tax, which the General Assembly voted to eliminate and is now phasing out. At its peak, the city was receiving $300,000 per year from that tax.
The remaining 2 cents will be designated to increase annual paving budget for the city to $450,000.
The council also plans to increase the pay for most city employees by 3%. The only employees not included would be those on special pay scales in the Electric Department and the Water Resources Department.
With the completion of the final workshop, the proposed budget has firmed up. When the council begin working on the new budget in April, its appeared expenses exceeded revenue in the General Fund by more than $2 million. Projected revenues were set at $18,663,485 and expenses were projected to be $20,756,602.
Following the workshops, the gap between expenses and revenues has been reduced to $500,000. One option the city may follow to close the gap is to borrow funds with a capital outlay note. The council looked at both a $600,000 note and a $700,000 note.