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Followup on Tax Increase

2011/09/20

See also Empire Tribune article on tax increasse

Once again, Mike Boucher gave an excellent argument against the tax increase, but it was still disregarded by the majority of the council.

Boucher had reviewed the last six years’ CAFRs, and felt that the projections for sales tax revenue were excessively low; as in, low by far more than the increase in overall revenue that would be generated by the tax increase.  This parallels arguments made by both Nash and Svien over the last few weeks.

Nash proposed that the base operating rate be left as it is, and only the debt service portion of the rate be increased slightly to offset interest on the city’s debts, pointing out that even the worst year of the last several generated far more sales tax revenues than would be needed to cover the amount the proposed increase would generate.

Svien spoke in favor of Nash’s motion, raising the point that the sales tax revenues are looked at as “extra” money at mid-year, and are spent with less concern than should be given to such issues as a result.

McDanel also supported the motion, saying that he agrees that the budget revenue projections are underrestimated to the point that the tax increase is not necessary.

Evans spoke against the motion.  Although he admitted that he expects at least $400,000 surplus at mid-year, he doesn’t want to risk having less money available if the actual revenues aren’t that good.  He once again brought up the 3 million the city had “saved” by not acting on every single citizen request for new capital projects, which is quite reminiscent of a certain article in Yahoo Finance.

Nash’s motion failed, with only Nash, Svien and McDanel in favor.

Alan Nix moved acceptance of the original proposal for the full increase, which passed with only Nash, Svien and McDanel against it.

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