Finance Committee members rejected a 19-cent property tax decrease Thursday night that would have reduced McMinnville’s tax rate to $1.90 and cost the city $380,000 in annual revenue.
The measure to leave the tax rate at $2.09 passed 2-1 with Aldermen Billy Wood and Clair Cochran voting in favor of it, and Vice Mayor Everett Brock voting against it.
Prior to the vote, Brock predicted it would be an uphill battle.
“I know I’m going to be outvoted on this, but I would like to roll it back,” Brock said. “We raised the tax rate when it was necessary. Now we need to give some of that back.”
According to city administrator David Rutherford’s projected numbers, the city will lose approximately $380,000 annually by the reduction and would be looking at a significant financial shortfall in three years. The city would end fiscal year 2014-15 with just $411,330 in its fund balance. However, $2 million is needed to meet the city’s financial obligations.
The projected numbers were scary for some officials.
“After looking at the three-year projections, I think it is irresponsible to reduce the tax rate,” said Cochran.
Brock disputed the numbers.
“There is no way to accurately predict what the city’s financial situation will be in three years,” Brock said. “If it looks like we will need it, we can increase the tax rate in two years.”
Because the issue will be presented to the full board, Wood, who is the Finance Committee chairman, opened the discussion to all board members at the meeting.
“The people I’ve talked to have said to just leave it,” said Alderman Jimmy Haley.
A tax break for two years is better than no tax break, says Brock.
“If you are willing to give city residents a tax break for two years, I’m sure they would take it,” said Brock. “Two years is better than no tax break at all. I would like to see it rolled back.”
Alderman Junior Medley supported leaving the property tax rate the same.
“I would hate to see you change it,” he said. “It’s been set. Just leave it unchanged.”
Mayor Norman Rone says he was in favor of a decrease, but future projects have changed his mind.
“I know I was originally in favor of the tax reduction,” Rone said. “The city is right now looking at doing projects, such as a paving and Park Theatre renovation, that will be very costly. I’m now in favor of leaving it unchanged.”
The Finance Committee’s decision to leave the property tax rate at $2.09 will be presented to the full board for its consideration.
City tax decrease taken off table
