Giving the city our two cents?

On Thursday, Aug. 29, City Council held a special formal session to discuss whether to make additional budget cuts to an already slim budget, or to increase the property tax rate in order to raise a million dollars needed to fund a list of service priorities identified by City Council and staff. Mayor Charles Worley offered the invocation asking, “Most gracious and heavenly Father… help us always follow the Golden Rule: to do unto others as we would have others do unto us.” As the evening’s discussion unfolded, Council members were clearly divided in how they would “have others to do unto them.”

Councilman Brian Peterson made a motion to adopt the budget proposed by staff — a budget that included an additional $1,033,659 to fund a list of service priorities not funded in the previous interim budget. In order to generate the extra revenue needed for this expenditure, city staff recommended a tax rate of 53 cents per $100 of property valuation. This represents a 2 cent step up from a revenue-neutral tax rate of 51 cents (based on Buncombe County’s recent reappraisal of property values). The service priorities funded by the increase would include repairs for streets and sidewalks, the Asheville Buncombe Community Relations Council (which addresses fair housing), the Enka Fire Department, the Burton Street Recreation Center and police overtime for the Biker Bash. Jim Ellis seconded Peterson’s motion to adopt the proposed budget, and the discussion began.

Vice Mayor Terry Bellamy was the first to voice opposition to the proposed tax increase. Referring to service priorities discussed at the August 20 work session, Bellamy pointed out that repairs for streets and sidewalks were the most expensive item on the list, totaling $900,000. The remaining items totaled only $133,000. She observed that Council had already slashed $2.6 million from the budget to compensate for money withheld by the state, and insisted that the city could certainly trim an additional $133,000 to fund all of the service priorities other than tthe pavement repairs.

Holly Jones quickly countered that Bellamy’s figure was short by at least $90,000 dollars, due to sales tax losses. Jones went on to say that the $900,000 needed for streets and sidewalks could not be so easily dismissed, because the money represented a necessary investment in basic infrastructure that would cost the city much more in the long run — if repairs were put off until a later date.

Peterson elaborated that the city must invest in streets and sidewalks in order to attract tourists and businesses to the area. “If we look like a dump, people won’t be coming here,” he said.

Bellamy asserted that it was difficult for her to support a tax increase for which citizens would “… not get anything new.” She voiced concern that the increase would merely support the status quo, and that this would be “… very difficult for our citizens to chew … especially when there are people who aren’t even getting a raise this year.” She added that “It’s not just homeowners” who would be affected, but that the tax increase would include motor vehicles, mobile homes, and business assets. She insisted that, in lieu of raising taxes, “We need to tighten the belt a little bit more and see what happens at the state level.”

Both Peterson and Jones noted that continued insecurity about state funding made the belt-tightening approach imprudent. Ensuring the vitality of programs like Burton Street Recreation Center and the Community Relations Council required more than squeezing one or two hundred thousand dollars from other areas of the city budget. They asserted that such programs would be among the first to get cut in the face of further state-revenue losses.

“We don’t know what’s coming down from the state,” Jones reminded the others, suggesting that the tax increase is as much about establishing a financial buffer against possible future state revenue losses as it is about investing in infrastructure.

Peterson confirmed that the streets and sidewalks of Asheville may not see a drop of new concrete in the upcoming year. “We’re hoping we can do these things, but if the state government has to make cuts and shares the state’s pains with the cities, we will have saved up [by raising taxes now].” Continuing to belt-tighten without a safety net of savings would bring the city to a dangerous precipice, he said. “If we lose any more [state] funding, we’ll fall off that edge, and will be laying off — potentially, later this year — firefighters, police officers, [and] closing community centers.”

Joe Dunn offered the age-old koan of fiscal conservatives: “How do you tax and spend your way to prosperity?” He echoed Bellamy’s rallying cry for further belt-tightening, and asked Council members to consider the impact of a tax hike on development and hotels. “Their taxes are going to go through the ceiling.” He added that, if at some point taxes need to be raised, “Council can do it at a later date.”

Holly Jones countered swiftly, “It’s now or never,” referring to the Sept. 1 cut-off date for raising property tax for this fiscal year.

Carl Mumpower remarked that now is not the time for a tax increase. Noting that these are economic hard times for most citizens, Mumpower suggested that the city’s “… level of frugality should reflect that of our citizens,” and added that it is “unreasonable to ask our citizens to compensate for the state budget crisis.”

Worley agreed that such a request is unreasonable, but asked, “What else are we going to do — stick our heads in the sand?” He explained that he had never voted for a tax increase in the past, but, “if there ever has been a time when we have to raise taxes … now is the time.” He also challenged Bellamy’s claim that the tax hike would “not give us anything new,” and highlighted the importance of restoring funding to streets and sidewalks. Worley noted that neglecting that project two years running would cost the city more money in the long run.

Referring to budget allocations for festivals and Parks and Recreation, Dunn insisted that Council could “look at areas we could still cut before taking this step [of a tax hike].” He said that some of the service priorities extended beyond the government’s duty to provide “quality basic services.” He criticized what he saw as an effort to do “something for everybody.”

Mumpower echoed Dunn’s sentiment. “I think we’re trying to do it all, and this is not the year to do it all.”

In the end, the measure passed four to three, just in time for the increase to be reflected in city resident’s tax bills.

During the public comment period, Asheville native Bill Stamey took the microphone and articulated the dilemma faced by low-income property owners. He explained that he bought his house for $15,000 dollars and had lived in it for 30 years. His house is now appraised for over $140,000. He remarked that the people moving in around him, many of whom were moving to Asheville from other cities, were able to pay more for a house and were driving up property values. “I’ve been here all my life,” he said. “It feels like I’m gonna get taxed out of my house, or taxed out of my city.”