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PTC sinks proposed property tax hikeThu, 08/27/2009 - 8:04pm
By: John Munford
On a 3-2 vote, the Peachtree City Council Thursday night avoided a proposed property tax increase. Instead the city will pull an estimated $451,000 from its cash reserves to balance the $26.53 million budget for the upcoming 2009-2010 fiscal year. The move will reduce the city’s cash reserves from 36 to 34 percent of its total operating budget. Although the city’s reserve target range is 20 percent, Finance Director Paul Salvatore noted that the reserves are also used for cash to pay for grant projects in advance of receiving grant funds for example. Councilmen Don Haddix and Doug Sturbaum said they favored the property tax increase in case the economy doesn’t bounce back. But they were voted down by Mayor Harold Logsdon and council members Steve Boone and Cyndi Plunkett. The property tax increase would have increased the millage rate by .238 mills, which would cost an additional $23.80 on the property tax bill of a home valued at $250,000. Several residents urged the council to use cash reserves instead of enacting a property tax increase during an economic recession. Because the state has frozen property reassessments for three years starting this year, the only property owners who will be paying higher taxes are those who made improvements to their property that were recorded by tax assessors. In some instances where property values have dropped, those homeowners will pay less in taxes this year than in the past, all depending on how much their property valuation dropped. The city’s 2009-2010 budget includes no merit or cost of living raises for city staffers who in the past year have had to pay more out of pocket for their insurance. The city’s parsimonious ways have even resulted in police and fire officers having to pay between $30 and $100 a month for the privilege of utilizing a take-home vehicle. The city also eliminated 24 positions this past year, 19 of which were landscapers who were replaced with a contracted service that mows many areas of town less frequently. The budget cuts were blamed on significantly reduced sales tax revenues due to less spending in Peachtree City. The new budget does include six firefighters who will cost the city only $50,000 this year thanks to a federal grant. Also included are a new police detective and a new patrol officer. Haddix said he supported the tax increase this year on the premise that the economy is not going to bounce back immediately. Having the increase this year would allow the city to avoid a larger tax increase in future years, Haddix said. Sturbaum said he liked the idea of implementing the cost of living increases for city employees though he realized the idea was unpopular. He also suggested that if the new one percent sales tax (SPLOST) passes, the city would be in a position to roll back the millage rate in the future. Plunkett said she supported the use of cash reserves because if the city was holding onto roughly $9 million in taxpayer money “we have to be able to justify why.” Mayor Harold Logsdon said he felt the cash reserves were supposed to be used in difficult economic times to balance the budget. He has long been a proponent of using reserves to avoid a property tax increase. “We have done a lot of cutting and reorganizing this year,” Logsdon said. “I have said a crisis is a terrible thing to waste and we didn’t waste it. We have slashed, cut, reorganized and outsourced.” Logsdon said the city is also very efficient with about one-third less the number of employees than other Georgia cities of similar size. Councilman Steve Boone said he felt the economy dictated the need to avoid a property tax increase. “We’ve got to tighten our belts,” Boone said. The city is projecting to get $6.35 million in sales taxes this coming budget year, but that figure is about $800,000 off the collection level from the 2007 fiscal year. Salvatore noted that this will be the third year in a row that the city would be dipping into its cash reserves to balance the budget, which may be looked upon unfavorably by the agencies that judge the city’s bond rating. That rating in turn affects the interest rates available to the city to finance projects. Boone said he didn’t think in the current economy that the city’s bond rating would be affected. login to post comments |