Decatur City Commission to Vote on $70 Property Tax Credit
Decatur Metro | October 3, 2010Thanks to better than expected revenues and “strong expenditure controls by City employees”, the City of Decatur found itself roughly $1,000,000 in the black for the completed 2009-2010 fiscal year.
As such, City Manager Peggy Merriss is recommending that the Decatur City Commission pass a resolution at tomorrow night’s commission meeting that will provide a $70, one-time tax credit to City of Decatur property owners, which, if approved, will appear on late October’s tax bill.
According to Ms. Merriss’ note to the commission (page 22 – 23 of the meeting materials – pdf), the city’s audit revealed that revenues were $510,000 better than conservative projections, while expenditures were roughly $875,000 less than budgeted. (To get the +$1,000,000, add the +$1,385,000 summarized in the previous sentence to the -$393,000 originally set aside in the 09-10 budget from the reserve fund.)
The one-time, $70 tax credit would “cost” the city approximately $360,000. That in addition to a one-time “pay period compensation adjustment” for city employees at $200,000 and dumping the remaining funds back into the reserve fund (putting it back at its “prudent” max of 34% of annual operating costs – $6.4 million) accounts for all $1,000,000 in additional revenue.
According to the City Manager, this particular allocation “would recognize that the fund balance increase resulted from both additional revenues, including taxes, and from expenditure reductions managed by City staff.”
Nice gesture–why not just keep it and use it to improve schools (do I need to say: containers!) or something else that supports the community?
I was just about to post something similar. I wonder if there could be an option for anyone who wanted to “donate” their tax credit towards a paraprofessional at the elementary school level or another AP course at the high school level or restoration of the RMS football team or something like that. The $70 credit might be needed badly by some citizens but others may have been planning just fine without it. But I don’t want just a non-specified donation to the schools–it’ll get lost in the several million dollar budget. I think citizens would feel best about willing their tax credit over to CSD if they knew it was going toward a particular service for the students that wouldn’t otherwise be provided because of the tight budget. If the $70 was going to fund a car allowance for a senior administrator or a bonus for a staffer who already earned over $100,000 compared to the $35,000 to $60,000 that most teachers earn, I’d be less excited about giving up that tax credit. Not saying that those perks are undeserved, especially given what goes on in other school systems, but in this economy, that’s not where I’d donate my tax credits.
Keep in mind that the City budget and CSD budget are two completely separate entities. This action refers to the City only and there is no intermingling of funds between the two.
I didn’t think so either but I that’s what came to mind, just as it did to dantesvalley. Principle is the same when it comes to the city budget. Getting a rebate for $75 is great and it may be a sorely needed unexpected asset for some. But many may not be able to do a whole lot with a one-time sum of $75. But $75 times a whole bunch of taxpayers could fund something nice. Folks would only be willing to give up that $75 if it was going towards a well-specified item of general benefit to the community, vs. just going back into the general coffers.
My knee jerk reaction to this would be that the city should just stick it in an emergency fund or do something that would locally economically stimulative, but it seems like they are trying to be equitable about the whole thing. That is very nice.
It is a nice gesture, and its impressive they can make it, although I too wondered about the emergency fund. We do have one, and a the City wants to use considerable chunk of it — a lot more than $36K, I think — to begin paying for a new $16,000,000 debt.
Make that $360K.
Pros – the city is fiscally responsible enough to run surplus during a difficult economic situation. They have cut costs significantly. They forecasted conservatively. And they are looking to give tax dollars back to residents, rather than find somewhere to burn them.
Cons – a flat $70 rebate is disproportionate. Some of us pay 5 figures in property taxes, and others pay nearly nothing, but all property owners get the same amount back. Give us a millage reduction and I’d be much happier.
Your point may be well taken, but I don’t think the millage rate can legally be changed at this point.
Yeah, I guess I should clarify – it would be better if they could find a way to return it in the same proportions it was collected. Maybe that means putting in the emergency fund for now, and doing a millage adjustment for next year.
If individuals want to re-direct their rebate to the benefit of the school system, why not accept the rebate and make an equivalent donation to the Decatur Education Foundation? I believe such a donation could be directed. That would keep either the City or CSD from winding up with an accounting burden.
The budget surplus is only partly due to tax revenue–it was also generated by conservative projections and careful spending. Therefore, a flat amount as a rebate is not unreasonable. Personally, I’d rather they save whatever it would cost administratively to calculate and implement individual amounts. Besides, just as we each pay a different amount in property tax, we each derive different degrees of benefit from City services. I don’t pay five figures, thank goodness, but I also don’t use the dog parks, the athletic fields and courts, the swimming pools, the Rec center–so I benefit only indirectly in having them. I’m not saying we shouldn’t have those facilities, just that if you were going to parse the rebate according to who paid in how much, it wouldn’t be unreasonable to also consider who got what benefit out of it. I think the proposed plan is much more practical and fair enough.
Problem is that it’s a tax credit, not a rebate check for the taxpayers. So it would require a number of steps for the taxpayer to take to convert that tax credit into a donation to DEF. Not many are likely to do it.
Now if there was an easy, web-based and/or phone-based way to electronically indicate that one wants one’s tax rebate to go towards a particular program, e.g. DEF, that would work. Not sure if it’s possible accounting- and techonology-wise.
If it’s that big of a deal, write a $70 check to the school system at the same time you write the check for the property taxes.
A handful of people writing a check to go into the general coffers of the school system won’t achieve much and few taxpayers, if any, are likely to do it. A huge number of tax credits going towards a particular program or purchase in CSD could have a huge impact. But, for it to work, there would have to be an easy, one-step mechanism to choose a transfer of the tax credit to DEF, or CSD, or any other program for that matter. Not sure if the accounting and technology would permit that kind of optional transfere. It may be a pie in the sky idea.
You are either going to write a check to the City that is $70 less than it would have been; or your mortgage escrow account is going to be $70 up at the end of the year. Either way, it’s all on paper anyway.
Talk to DEF and learn how your donation might be directed. Write them a check for the $70. Talk to a bunch of your friends and get them to do the same thing, directing their donations the same way. Then you’ve used your little windfall to do something positive for CSD without dragging either CSD accountants or City accountants into it..
If this is done, consider taking your $70 and spending it in a Decatur business you don’t normally frequent. Support of our local businesses may be the best thing you could do to support our city and our schools.
Why not band together and start a scholarship fund?
I’m sorry, but don’t you all know that we live in Tea Party country, and you’re NOT SUPPOSED TO COMPLAIN ABOUT GETTING MONEY BACK FROM YOUR LOCAL GOVERNMENT! Seriously, what are you trying to do, start some sort of “rational” convesation about responsible government. You people obviously have no idea what you’re talking about. Meet up at Java Monkey this weekend so we buy out their tea stash and talk revolution.
I appreciate the $70 and could use it. Nice, simple way to reward everyone for improving/maintaining property values and keeping spending down. And, for motivating people to keep it up. Huge corporations do this all the time and it’s great for spirits.
Love the idea of spending your $70 on local businesses!
I guess I didn’t realize that the school and city budgets had no overlap. When I first read this I thought – wow didn’t we just ask our teachers to take a paycut – did we? I thought I read that. I just tried to find it on the CSD website and perhaps I made it up.
I am also remember (perhaps not accurately) lots of governments who were rolling in dough and then found themselves in crisis (especially in California). I love that they are trying to be responsible but I say some rainy day fund and some well-picked projects. There will be other years when we cut things painfully and there is no money to round it out. Adjustments should be made in future collection of taxes not in floating it back in high times.
Congrats to the city for a surplus.