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Sylva sets 42-cent tax rate
By Carey King
It’s finally decided: In the coming year, Sylva’s property tax will be 42 cents per $100 valuation.
That puts the town’s 2004-2005 budget at $2,133,673. Though the rate is three cents lower than last year’s, Sylva’s total property tax intake will increase 10.9 percent due to the recent property revaluation. The overall budget, however, will grow by only 1.9 percent, a $40,062 jump over 2003-2004.
Town leaders eventually compromised on the 42-cent rate after a mediation session Tuesday (June 29) that followed an unproductive public hearing and budget meeting Monday night.
Playing a role that was part mediator and part auctioneer, town attorney Eric Ridenour attempted to forge some agreement between board members that have been at a stalemate since May.
“Can you come up a cent?” Ridenour asked the two that wanted to see last year’s rate lowered.
“Can you go down two? Gimme two,” he asked the pair who were determined to keep the levy the same.
Town leaders and finance committee members Eldridge Painter and Anne Cabe announced last month that they wanted to keep the rate at its current 45 cents, while board members Maurice Moody and Ray Lewis said it should be lowered to 38. Danny Allen, the fifth council member, refused to give his opinion on the matter at the time, but later adopted the position that a middle-of-the-road 41 cents would be best.
According to Painter and Cabe, the 45-cent rate was necessary to meet taxpayers’ demands for services, make cost-of-living adjustments for town employees, and keep Sylva’s financial house in order by replenishing accounts it has depleted for projects in the past. It would give the town enough financial flexibility to prevent having to raise taxes before the next property revaluation, Painter said.
According to Moody and Lewis, the 38-cent rate was crucial for the town’s low-income and elderly residents who struggle each month to pay their bills. Lowering taxes would give more people incentive to buy property or continue living in town, Moody said.
The deadlock continued Monday, as Painter’s proposal to bring 45 cents to a vote received support only from Cabe. When Moody called for a vote on the 38-cent rate, only Lewis gave his second. Allen’s move to act on a 41-cent rate died without backing from any other board member.
During mediation, Ridenour attempted to forge an alliance between board members around an issue on which they all agree: that Sylva’s finances are in trouble because the town provides services to county residents who don’t pay Sylva taxes.
“We’ve been screaming, crying and spitting to be heard at the county level,” Ridenour said. “What I’m suggesting here is that we go back to the county and get them to pay their fair share.”
Sylva residents pay both town and county taxes, which means they pay double for amenities such as the pool at Poteet Park, since its funding is split between the two governments, Ridenour said. The town pays for the police, roads and street lights used by county residents when they come to take advantage of downtown activities like the Fourth of July fireworks, he said, and the county benefits economically and culturally from Sylva’s “Mayberry-like setting.”
With about 2,400 residents in Sylva and some 29,000 more in the county, “it’s almost a 10-to-1 ratio,” Ridenour said. “Twenty thousand people are riding the backs of a few people.”
Up against a budget deadline of midnight Wednesday (June 30), town leaders agreed with Ridenour’s thinking, but were hesitant to give up their tax-rate positions based on the hope of a solution that would have to be hammered out with county commissioners.
“You’ve hit it on the head,” Painter said. “But it’s going to take a couple of years, or three, or maybe more.”
“We can’t count on the county bailing us out,” Moody said. “As far as the county helping us, I’d say the chances are slim to none.”
Compromise came instead because the deadline was drawing near. Ridenour pressed Moody and Lewis to name which services or positions they would cut from the finance committee’s proposed 45-cent budget in order to achieve their desired 38-cent rate. Debate up to that point had centered on tax-rate numbers board members were intent on setting, not on the line-item details that would make different rates possible, Ridenour said.
“You have to decide,” he said. “Unfortunately, that job falls on your shoulders. You’re going to have to step forward and make that cut.”
Lewis said he’d chop administrative expenses, while Moody said he would eliminate new carpet and computer stations for Town Hall, reduce a repayment to the town’s UDAG fund, and cut out merit pay for town employees.
After haggling a little over numbers and making a few calculations, board members found that a 42-cent rate would nearly meet Moody’s stipulations.
Brought to a vote by Painter and seconded by Cabe, Allen voiced his approval. Moody and Lewis also agreed, saying they wanted to make the vote unanimous.
The task of hammering out the implications for the town’s budget was left to town Manager Richard McHargue, who said that the revenue likely to be generated from a 42-cent levy will allow the town to put $10,000 toward cleaning up abandoned properties, place $33,635 back in its UDAG fund and $11,789 in its fund balance, match state road improvement funds with $5,000 and give town employees a cost-of-living increase of 2.5 percent. It will also allow $8,000 for a new merit pay system that will be implemented in January.
However, McHargue said, the rate will not raise enough funds to plan for expenses the town will face the year after next - an increased payment of $20,000 to the fire department, based on the revaluation, and more town employee retirees needing pension.
Town leaders face a challenge in negotiating between keeping taxes low and generating enough revenue to pay for the services taxpayers need, he said, a fact evidenced by comments made at the public hearing Monday night.
A crowd of more than 20 voiced complaints about rotten roads, crumbling buildings and lack of street signs. They also voiced opposition to maintaining the current tax rate after the recent property revaluation –though, McHargue said, increased revenue from the revaluation is how Sylva pays for paving, hazard removal and street maintenance.
Such opposing views are what created the impasse among board members, Ridenour told the audience.
“You can’t have your cake and eat it, too,” he said.
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