The Lebanon City Council failed on its second attempt Wednesday to garner enough votes to pass the city’s budget for next year with a property tax increase attached to it.
The special called meeting served to accomplish passage of several items upon introduction, but the budget remained in gridlock on a 2-2 vote. Councilors Kathy Warmath and Lanny Jewell remain opposed to the budget, due mostly to the proposed property tax increase city leaders said would erase a $2.6 million deficit.
Councilors Tick Bryan and Rob Cesternino voted in favor of the budget both Wednesday and during a June 4 meeting when it also failed.
With the absence of councilors Fred Burton and Joe Hayes on Wednesday, there were not enough council members present to allow Mayor Philip Craighead to break the tie.
Following the meeting, the council immediately moved into a budget work session That started with two proposals from Finance Director Russell Lee via email that would further lessen the burden on taxpayers from the proposed property tax increase.
Taxpayers in Lebanon currently pay 34.56 per $100 of assessed property value or $86.40 per $100,000 in assessed value. The last time property taxes were raised was in 1992 when the rate increased by 18 cents.
Lee’s latest budget cuts involve the removal of a $300 bonus full-time city workers would receive on their anniversary start date with the city. That plan would reduce the proposed tax increase by 0.75 cents per $100 of assessed property value.
Lee said another 0.25 cents could be realized with a $20,000 increase in sales tax revenues based on May’s sales tax receipts. Lee said at a previous meeting, projected sales tax revenues would be about $8.7 million, which is the first time it has exceeded 2005-06 figures.
As it stands, the plan before the council following Wednesday’s work session would include a 25.44-cent property tax increase, but would balance the budget next year and erase the deficit without dipping into the city’s reserve fund.
Following the meeting, Jewell said he remained opposed to an all-at-once approach to raising property taxes. He said an incremental approach with some money coming from the city’s reserves would ease the burden a bit on taxpayers.
“We've got some out there who are living paycheck to paycheck, and it's among all types of income brackets,” Jewell said. “If you are stretching your dollar to the limit, and if you are living in a bigger house, you are taking more of a lick.”
Warmath also remained opposed to a property tax increase – of any kind – following the work session.
“We do not have to have a budget in place by July 1,” Warmath said. “We have been as late as September some years. July 1 is not a drop-dead date. We have some wiggle room.”
But Bryan said he’s pleased with the budget and tax hike as it stands.
“If it means it will get the budget passed, I'm willing to do just about anything,” Bryan said. “Russell has worked his tail off on getting this down, and he doesn't have a whole lot of tail to begin with. If there is anything that [Kathy] or Lanny or Fred want to suggest, we need to hear it.
“I don't mind having budget hearings, but I don't want to go over the same things every time. We've gone over all the departments, and I don't see a lot of waste going on. We are still trying to run our town on a 1992 tax rate.”
Cesternino reiterated a previous plan to cut councilors pay in half to further cut the budget.
“If we put up employees' minuscule bonuses on the table, I think it's only fair that we give up something, too,” he said.
Craighead also expressed his approval of the budget with the tax increase included.
“It's hard on the council, the citizens and the employees to start out in such a hole every time, and it would be nice not to do that this time,” Craighead said. “It's my job to pull six councilmen together on this. We are trying to find that leap that you are willing to do. We've got to pull this city together.”
Craighead said another special called meeting would tentatively be scheduled for Tuesday at 6 p.m. to allow for final approval of some pressing matters before the city’s fiscal year ends June 30.