Coody's failure to trim the fat out of the budget as the council asked and his suggestion to use reserved money forces millage-increase talk

Tax hike? : Aldermen put property tax increase back on the table
BY DUSTIN TRACY Northwest Arkansas Times
Posted on Monday, October 20, 2008
URL: http://www.nwanews.com/nwat/News/70260/
At its Sept. 16 meeting the Fayetteville City Council didn’t even bat an eye as it flew through three readings of the city’s 2008 millage proposal without changing the rate, but a month later aldermen voted to give the issue another look.

The council will meet at 6 p. m. Tuesday in the Fayetteville City Administration Building to discuss the issue.

Wa rd 2 Alderman Kyle Cook made the suggestion at the Oct. 7 meeting that the group reconsider the millage issue. The group voted to repeal the Sept. 16 vote and push the ordinance through two readings before halting on the third, giving the council time to think about any changes it wants to make to property tax in Fayetteville.

Ward 1 Alderman Brenda Thiel said the talk is that the council might consider raising the millage by about 1. 5 mills to cover a cost of living salary increase for city employees. But she said there’s been no official statement of how much the increase would be or what exactly it would be for.

Cook said he only brought it up because the council really didn’t debate or talk about the issue the first time it came up in September.

“ I’m not saying I necessarily support a millage increase, ” Cook said.

He said he merely thought it was worth discussing since the council had been presented with a budget by Mayor Dan Coody that required a $ 535, 000 dip in the city’s reserves.

“ It’s a tough economic time, and we certainly don’t want to put more burden on Fayetteville but I honestly think the budget is at its thinnest, ” Cook said.

Cook said that when the council examined the budget last year and voted down a millage increase, opting to cut the budget instead, he stated then that if things didn’t get better, Fayetteville might need a millage increase, something he’s more in favor of than dipping into the reserve funds.

Cook stated that reserve funds eventually run out and that the city still has five mills available that it can legally levy under state statute.

“ The hard decisions have got to be made at some point, ” Cook said.

And the hard decision must come quickly. Fayetteville City Attorney Kit Williams said the Washington County Quorum Court likes all millage ordinances in their possession by Nov. 1, though he doesn’t believe it’s an absolute deadline.

Thiel said she doesn’t mind discussing an increase but she really wishes the discussion didn’t happen so late in the game.

“ I wish we had discussed it whenever the public would have had more time to give their input, ” she said. “ This is a bad time to be talking about millage with the economy the way it is. ”

Thiel said that she wouldn’t really consider an increase if all it was for was to pull the budget out of the reserves, she said she might consider it if it was to give city employees a cost of living adjustment.

“ I would want to get a better idea of how close our city employees are being paid compared to other neighboring cities, ” she said. “ I don’t want to see us in a situation where we’re laying people off. My minds definitely not made up. ”

This all goes back to last year's failure of the Coody administration to present a balanced budget. While the mayor was in Europe, the council dug in and found a way to avoid the millage increase and balance the budget.
Now, Coody says he wants to dip into the city's important reserved fund to operate, which is another way to put the onus on the council to find a way to balance the budget.
Using the reserve may sound easy and painless, but suppose revenue doesn't increase and the city can't replenish the reserve before more of it is needed. What then?
Fayetteville can't stop paying employees or providing services. Without the reserve, a desperate situation could arise.

Asking people on a fixed income to pay more of any tax is a tough thing. But the people with the lowest income already know how to sacrifice to survive. It is the top earners who complain the most about being taxed.

We'll see some tough negotiating on the budget regardless of whether a millage increase is authorized. It would be best if Mayor Coody got his staff to find the obvious places to trim. But he spends his time telling voters that his job is to present a budget he believes is best for the city.

His idea of what is best for the city simply doesn't include what is best for people or other living things.

Today's Northwest Arkansas Times story on the millage issue being on Tuesday's council agenda is below:

Some city officials are not even considering a raise in property taxes.

“ The people of Fayetteville are overtaxed, ” Ward 3 Alderman Bobby Ferrell said.

Ferrell explained that during the tightened economy the last thing the citizens need is more taxes and he definitely won’t cast a ‘ yes’ vote for an increase come Tuesday. He added that he’s only voted for one tax or impact fee increase — a street tax he thought the city needed — during his time in office.

Whether it be for a salary adjustment or a budget supplement Ferrell said it’s not enough to warrant an increase. He said if he were in charge of the budget he’d be looking for more places to cut spending and not dipping into the city’s savings or making citizens pay more taxes.

Coody agreed with Ferrell.

“ I think now is the worst time since 1929 to ask for a tax increase, ” Coody said. “ I just think now is the time for all of us to pull together. ”

Copyright © 2001-2008 Arkansas Democrat-Gazette, Inc. All rights reserved. Contact: webmaster@nwanews.com