Duane Hicks
It’s budget time and town council once again has asked for a review of its services to possibly cut costs.
Mayor Roy Avis said during Monday’s budget meeting that council wants to see if the town can operate with the same amount of tax dollars as last year.
“We haven’t cut services but we’ve really re-organized our organization, and there’s not many savings left in it,” he admitted.
“But we’re just asking to go back and take another look.”
The mayor noted if the town is going to be short of tax revenue this year because of the property reassessment by the Municipal Property Assessment Corp., council should be looking at every way possible to save money rather than spend it in order to reduce any possible tax increases to property owners who may have seen their assessment go up this year.
“Four or five months from now, when some people’s taxes are going up 25 percent, they’re going to knocking on our door,” Mayor Avis remarked.
Coun. Ken Perry agreed, noting council is aware that, due to the reassessment, residents’ tax bills could vary wildly.
“It’s going to look really unfair and it’s going to look like we did it,” he said.
“So if we don’t look for some places to cut costs, and we’ve got to make water run and we’ve got to have roads over top of that water, the services that could be adjusted have got to be looked at,” Coun. Perry stressed.
“All of it.”
Mayor Avis noted town managers already are aware they’re working under constraints, but he feels taking another look is worthwhile as “we’re going to be into some rocky waves going forward.”
Due to reassessment, council is looking at a $210,700 tax revenue shortfall compared to last year.
This, in turn, means the starting tax rate will be about 1.75 percent higher than it was last year just to collect the same amount.
The current operating budget deficit is at $70,720, which equals a 0.67 percent residential tax levy increase.
On top of that, some property owners will pay more because their assessment has gone up.
Graduated tax rate
The town, meanwhile, will be looking at options to mitigate the effect of a substantial assessment decrease on the commercial class.
The Graduated Tax Rate program is a tool municipalities can use to establish up to three different tax rates within a class to tier the taxes paid based on defined assessment bands, town treasurer Laurie Lindberg told council at Monday’s budget meeting.
It provides that ability to protect lower-valued commercial properties by allowing the town to apply lower municipal tax rates to them than higher-valued properties in the same class.
The properties are organized in bands.
For example, a commercial property valued at less than $2 million (the first band) would pay 75 percent of the commercial tax rate.
A property valued at $2 million-$4 million (the second band) would pay 85 percent while a property valued at more than $4 million (the third band) would pay 100 percent.
This option is self-funded and does not shift any further tax burden on the residential or multi-residential property classes, noted Lindberg.
Council directed administration to further investigate how a Graduated Tax Rate would work here.
