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City budget barely passes, 4-3
Tax rate to remain $2.09
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The property tax rate for the city of McMinnville will remain $2.09 with the passing of the 2014-15 fiscal year budget on its final read Tuesday night.
The measure passed 4-3. Voting in favor of the budget were Mayor Jimmy Haley, Vice Mayor Ben Newman and Aldermen Rick Barnes and Billy Wood. Voting against it were Aldermen Mike Neal, Jimmy Bonner and Ken Smith.
Before its acceptance, three attempts were made to make changes. Each attempt failed with a mirror vote of 4-3. Voting against every motion were Barnes, Newman, Wood and Haley. Voting in favor of every motion were Neal, Bonner and Smith.
Neal motioned to cut each departmental budget by 1.7 percent, which he said would allow the city to reduce the tax rate by 10 cents and keep an extra $200,000 in the budget.
Smith motioned to cut $80,000 from the budget of McMinnville Public Works for land purchase and transfer $198,845 into the budget of Street Aid for paving.
“We have no intentions of purchasing land in Public Works in year 2014-15,” Smith said in explaining his motion. “They have $80,000 in there. The tax rate of $2.09 will stay the same. We will still have a fund balance of $3 million, which is what the Finance Committee wants.”
Neal made a second motion to amend the budget, providing a 25-cent tax decrease to senior citizens.
“I would like to offer up something that Mr. Barnes stated a few weeks ago,” said Neal. “He said he would like to see elderly, 65 and over, on fixed income and below the poverty level have a 25-cent tax reduction on their property tax rate. I would like to make that in the form of a motion.”
Haley informed the board that passing that motion would create a nightmare.
“We can’t have two different tax rates right now, according to this,” said Haley. “It would be a nightmare to readjust all of this and establish what revenues would be coming in. We don’t even have the number of who would be applying for it.”
The city currently participates in a state-funded tax relief program that does give a property tax discount to senior citizens who meet the income requirement. Tennessee voters approved a Property Tax Freeze Program in 2006. Officials have discussed opting into that program several times in the last eight years.
Wood says he is in favor of helping senior citizens, however, other communities started the Property Tax Freeze Program and stopped it due to people working the system in order to receive a undeserved tax break.
“Several counties that did this repealed it quickly,” said Wood. “What they found was large apartment complexes and valuable pieces of property were deeded into different people’s names with life estates. Consequently, every time there was a tax increase, the folks still paying taxes would get hit with a substantial larger percentage to cover the losses from the others. It sounds great on the surface. In reality, it’s very complicated.”
The 2014-15 budget will be filed with the state.