Despite a projected shortfall of $7.9 million, commissioners declined to raise property taxes, or tax manufacturers for the energy they purchase, two suggestions recommended by City Administrator Fred Russell that would have raised as much as $5.5 million.
The vote, on a motion made by Commissioner Mary Davis, passed 6-3 with commissioners Bill Lockett, Donnie Smith and Marion Williams opposed. Commissioner Bill Fennoy was absent Tuesday.
While taxpayers get a break, city employees, departments and even funded agencies take a hit. The budget includes no across-the-board raise for rank-and-file employees, many of whom haven’t seen a pay increase in several years. It also requires all departments – including those headed by elected officials – to trim 2.4 percent of their spending.
Taking the biggest hit is the city’s savings. The city has budgeted using its “fund balance” to balance the budget every year since 2008, and actually dipped into it in 2008 and 2012, depleting the account to $27 million. Russell said the 2014 budget needs $4.5 million from savings to be balanced, a requirement under state law.
The vote was closely watched by lobbyists and the Metro Augusta Chamber of Commerce, whose President Sue Parr has opposed imposing an excise tax on Augusta manufacturers to make up for millions lost as a new state sales tax exemption for energy used in manufacturers is phased in.
At Russell’s objection, the budget stopped short of eliminating all new programs and staff, which would have saved $1 million. Additions include $300,000 for Mayor Deke Copenhaver’s Augusta Regional Collaboration Project, a contract compliance officer and several new staffers requested by the District Attorney, Public Defender and Juvenile Court to fulfill state mandates.
Commissioner Donnie Smith, who supported charging the excise tax, asked how the city will replace lost manufacturing revenue in 2015 and 2016, when the exemption is fully phased in.
“So we’re going to pass $3 million next year onto the taxpayers, and $4 million the next year?” asked Smith.
Smith said after the meeting he wasn’t done with the budget and would recommend more drastic cuts in subsequent weeks or months.
“I’m coming back with some cuts,” he said.
Smith and Commissioner Marion Williams had concerns about Russell reading details about the motion – such as which departments will be affected – into the record after the vote was taken.
“You can’t agree to balance a budget of that magnitude then add the wording in,” Williams said.
The vote followed several attempts, including individual votes both for and against the excise tax. All failed to receive six supporting votes.
Commissioner Wayne Guilfoyle, who opposed the excise tax, said he wanted more time, as he’d just received a report from the city finance office on the growth of city departments since 2008.
Copenhaver reminded the group they can amend the budget through the year, but Guilfoyle said some other issue always seems to come up.
Community activist Brad Owens told commissioners the city was overlooking obvious areas to trim fat, such as the Downtown Development Authority, while targeting vital services like mosquito control.
“Please look, and stop rewarding failure,” Owens said.
In other business Tuesday, the commission authorized a public hearing on the city’s Tax Allocation District 4, to be formed with downtown parcels from the city’s large TAD 1. Once created, TADs allow cities to invest new property tax revenues above a baseline set the year they are formed into new development in the TAD.
Harrisburg activist Lori Davis, who also addressed the commission, suggested they eliminate TAD 1 as other Georgia cities have done when the districts’ taxable properties don’t show any digest growth.
Attorney Jim Plunkett, who developed the latest TAD proposal, said Commissioner Joe Jackson’s subsequent suggestion the city shrink TAD 4 to certain areas downtown and eliminate TAD 1 would be “part of the debate” when the public hearings are held.
Expected to increase in value, TAD 1 has instead diminished in taxable value by some $22 million since 2009, Plunkett said.