Council President Tom Smith, R-1st, said he would not support such a large tax increase, which would allow the city to collect the maximum amount allowed by the state for 2013 and about $3 million that was not collected this year.
But Smith also acknowledged that council would have a hard time finding $6 million in spending cuts to balance the budget, saying he and other members did not have enough details about various departmental budgets to make specific cuts.
“We may make a few cuts, but it’s not going to be anything of any substance,” he said. “If you really want to make cuts in the budget, I say it’s important on the part of the administration to tell us how many cuts they want to be made, and then make the cuts.”
If council members deny the full tax increase but also do not cut spending, the city will need to use money from its cash reserves – estimated at about $13.8 million – or some of its $75 million “Legacy” fund to balance the budget.
Councilman Glynn Hines, D-6th, said few council members would want to make unpopular cuts to the police or fire departments, or to services that many residents have come to expect.
“Yes, it can be done – the question is, who wants to make that decision of what to cut?” Hines said. “The departments are already coming to us with a real skinny budget. There’s not much fat.”
Hines said he would rather raise taxes on property owners but keep providing the same level of services.
Under the mayor’s proposed tax increase, the owner of a $100,000 home would pay about 6 percent – or $25 – more than he or she otherwise would have paid for 2013. However, the increase would seem greater because it is based on a higher average tax rate than the 2012 rate.
Under Henry’s plan, the city tax bill on a $100,000 home would go from $399.31 this year to $470.31 in 2013 – an 18 percent increase. Without any actual tax increase, the same tax bill would still go up to about $444.53.
Hearings on the budget with various departments are scheduled to begin Tuesday, with final passage set for Oct. 23.