When politicians start talking about “taking bold action,” you can almost bet it’s going to affect your taxes.
Just look at the dilemma facing Asheville City Council members for upcoming fiscal year 1998-’99: Buncombe County property values have risen dramatically, and both County Commissioners and City Council members must soften the resulting tax blow by lowering their respective property-tax rates — or face the ire of voters.
As a result of the county’s revaluation process earlier this year, median property values increased 27 percent, Asheville Budget Director Ben Durant told Council. He noted, however, that the median increase is estimated to wind up at 17 percent, after the county settles numerous appeals filed in response to the revaluation.
During Council’s May 21 work session, Asheville City Manager Jim Westbrook recommended a cut in the tax rate, from the current rate of 57 cents per $100 of property value, down to 52 cents. This rate would keep the 1998-’99 budget “revenue-neutral” — that is, it would bring in approximately the same amount of money as last year, Westbrook estimated.
To make do with the resulting budget, Westbrook squeezed operating costs here and there: Thirteen full-time staff positions, vacant for the past year, will be permanently eliminated, and each city department will shave its operating costs — as part of Westbrook’s well-known directive that staff “work smarter, not harder.” These measures will trim expenses about $1 million, according to Westbrook.
That’s the good news.
But the new budget sets aside no funds for a number of items that Council members have set as priorities for the year, such as the new Parks and Recreation Master Plan. Recently presented to Council, it calls for nearly $60 million worth of new facilities and improvements to existing ones in the next 17 years. Nor are any funds in Westbrook’s budget earmarked for plans and studies that are expected to be unveiled soon — each of which will present its own as-yet-undetermined costs: a downtown-parking study, a master-greenways plan and an affordable-housing study.
“Those plans will have to be evaluated as they come down the pike,” Westbrook told reporters after Council’s work session. Council members are already considering, for instance, whether to borrow money for a small-scale implementation of the parks-and-rec plan.
But there are more immediate budget-crunch problems, Westbrook explained. A new federal mandate may force the city to upgrade its stormwater-runoff system — for an as-yet-unknown cost. A still more immediate federal mandate may require the city to hire at least 16 new firefighters, at an estimated cost of $470,000.
A new Occupations Safety and Health Administration regulation states that for every two firefighters designated to enter a burning building (to check for victims and douse the fire from the inside), the city must have two others on standby at the scene, Asheville Fire Chief John Rukavina told Council members. Many Asheville fire companies now have just three firefighters available per truck for burning-structure emergencies, he noted.
At the current staffing level, Asheville has managed to avoid any accidental fire deaths for nearly five years, Council member Barbara Field emphasized.
But current staffing doesn’t meet the new OSHA guidelines, which if followed, could mean precious minutes lost while crews wait for backup firefighters to arrive before any are sent into a burning building.
Making his firefighters wait during a fire, said Rukavina, would be asking them “to physically restrain themselves from … doing what they do: save lives.” The new rule ensures that, when two firefighters enter a building, two more are ready to rescue the first two, if need be, he explained.
To comply with this new federal mandate, Westbrook said, Council can either shift money from lower-priority budget items, or increase user fees substantially, or add 1-cent to the proposed new tax rate (a 53-cent tax rate per $100 would increase revenues by nearly $430,000).
For a moment, Council members were nothing short of speechless — especially after Rukavina pointed out that the new firefighter-safety guidelines must be met by Oct. 5. A few Council members and city staff remarked that they couldn’t think of anything they could cut from the budget to cover the cost of hiring new firefighters.
“I’m not asking Council to make a decision on this today,” said Westbrook, with his usual low-key, matter-of-fact tone. “We’re not recommending [the 53-cent tax rate], but we don’t know how to fund this.”
“Why not coordinate efforts with neighboring and volunteer [fire] departments?” asked Council member Tommy Sellers.
“That’s possible,” Rukavina replied. If local fire departments back each other up, the new OSHA requirement could be met. But while Rukavina said he hopes to arrange this with neighboring fire departments, he said he didn’t think negotiations could be completed prior to the October deadline.
Council member Earl Cobb called the new federal requirement “frustrating,” and remarked, “We’ve already been doing alright with the number of people we have … but the feds changed the rules [this] February!”
Fellow member O.T. Tomes reflected, “If [we] keep being handed unfunded mandates, sooner or later, we have to bite the bullet.” … Which translates into higher taxes or fewer services.
Field reminded Council members about some of the city’s unfunded or underfunded needs, such as improved downtown parking and a host of infrastructure needs. The city’s small, $600,000 annual budget for street and sidewalk improvements, for example, forces staff to pick just a few from a large list each year, she pointed out.
Mayor Leni Sitnick offered this reflection on the overall dilemma: “We’re going to have to continue this juggling act until we’re willing to take some bold steps.”
She half-seriously suggested that the city consider increasing its hotel-room tax to 6 percent, or get the North Carolina General Assembly to approve an additional 1-cent local sales tax. Either revenue source could be dedicated to parks-and-rec improvements, new sidewalk construction or other needs, she said.
“For the benefit of those writing this down,” said Vice Mayor Ed Hay, with an eye on reporters attending the session — and, perhaps, his mind on the daily paper’s recent attacks against Council — “you’re not really suggesting that [room-tax increase], are you, Mayor?”
Sitnick assured him that she wasn’t. “It was just one of those ‘bold’ ideas,” she said.
A bit later in the session, Sitnick joked that Council could save $1.2 million by doing away with the the city’s Administration Department.
“That includes the city manager, the city clerk, the city attorney, City Council ….” Westbrook pointed out.
That idea died a quick death.
As for more likely choices and suggestions, Council will hold a public hearing on the proposed city budget on June 9.