Budget brandishing

Those who arrived in Asheville City Council chambers June 11 expecting a resolution, or at least some more clarity, about the city's budget and taxes for the coming year were, no doubt, disappointed. Council members face an onslaught of financial curveballs — a tax-and-fee overhaul from the GOP-dominated legislature that would cut municipal revenues statewide, uncertainty about pending bills that target the city’s bottom line, and a property revaluation that affects property-tax rates.

The night featured a public hearing, giving citizens the chance to weigh in on the $143 million proposed budget city staff had brought forward several weeks ago. It also gave Council members the opportunity to voice their views.

The latest budget proposal takes two big risks: It assumes the city will retain the water system over the course of a court battle and that legislators will pass a state bill allowing Asheville to hand off its parks-and-recreation services to a new Culture and Recreation Authority managed by Buncombe County.

Further, it assumes the city can use the anticipated annual savings from that authority — $2.5 million — as leverage to take out a loan for an $11 million wish list that includes affordable housing development, infrastructure improvements and some funding for a major upgrade of the Asheville Art Museum.

But there’s a kink in this plan.

“It's highly unlikely that [parks] authority, and its savings in our budget, will come true,” Council member Marc Hunt noted. “We need to direct the city manager to prepare a different alternative,” he said.

If Council wants to follow through on its wish list, regardless of what state legislators do, there’s only one solution: raise taxes.

Concerns, fears, worries, doubts

To bring in the same amount of revenue as last year, the city budget starts with a 1 cent per $100 property tax increase. Faced with similar financial challenges, it’s likely that Buncombe County commissioners will also raise taxes. If Council approves more than the revenue-neutral rate, city taxpayers would be overburdened, said speakers like John Miall, the city's former risk manager and a mayoral candidate this year.

“This budget is anything but neutral,” he said. “The vast majority of folks probably agree that a tax increase was inevitable, but I have a big issue [when] $2 million is going out the door to the art museum.” The Asheville Art Museum is anticipating a $20 million expansion and renovation; it’s a high priority in Council’s economic-development plans, and Council’s $2 million allocation would help secure loans and grants for the project.

If a recreation authority does emerge from the North Carolina General Assembly, Miall added, the burden will still fall upon Ashevilleans to help pay for its upkeep via their county taxes, even if city government saves money overall.

Haw Creek resident Saul Chase raised similar concerns, arguing that the proposed budget overemphasizes downtown and funds local organizations instead of needed street and sidewalk improvements elsewhere in the city.

“The capital improvement budget doesn't present a pretty picture,” Chase continued. “Your job as City Council members is not to improve nonprofits' ability to get money.”

Aspiring and perspiring

Then came Council's turn to highlight their individual positions. For several on Council, such as Hunt, the latest budget proposal gives the city a chance to break out of years of putting aside infrastructure needs and other improvements.

“We're at a time we can do some creative things with some vision to help our citizens' quality of life and improve economic development,” he said. “We've got to find a way to get to that.”

In this case, minus the savings from a recreation authority, being proactive would mean increasing the tax rate to 47 cents per $100 (the current rate is 42 cents).

Council member Jan Davis said he was “inclined to agree … there's a time when you have to step up and say 'we have a responsibility.'”

Council member Gordon Smith also said the wish list represented a chance at a viable future for Asheville. “We have a choice before us: we're either going to be an aspirational city that grows toward our goals or we're going to be a stagnant city that starts to decline.”

When asked by Council, staff noted that the last major tax increase (4 cents per $100) came in 1995 and was earmarked for road repairs.

Council member Chris Pelly advised his colleagues to move carefully. He said, “I've got to tell you, I'm still undecided,” he said. “Between what we're talking about here and what the county's bringing forward, we're talking about a significant impact on residents. I'm not convinced yet.”

Mayor Terry Bellamy also expressed some doubts, asserting that the city needs to work more with the state delegation to make the recreation authority happen.

Council member Cecil Bothwell accused state legislators of “essentially holding the city and county hostage” by refusing to act on the recreation authority bill unless Asheville drops its lawsuit over the water-system merger. He asked whether Council members could pass multiple budgets for different state legislation scenarios.

They can't, according to the city's attorneys.

And Council’s budget deadline looms large: They vote on it June 25. Bellamy observed that Council could wait until midnight, June 30, if necessary.

— David Forbes can be reached at 251-1333, ext. 137 or dforbes@mountainx.com.