Tax hike looms for Sylva residents

By Lynn Hotaling

After three drafts all showed next year's budget in the red, Sylva's manager said a tax increase appears inevitable.

"No one wants to raise taxes, but it will have to be done," Richard McHargue said.

Town officials avoided a tax increase last year only by paring the budget drastically, McHargue said, but repeating that feat for the next fiscal year has proven impossible.

The "bare bones" budget proposal McHargue prepared for the town totals $1,820,887 and was more than $22,000 in the red, based on current revenue projections.

Two other proposals, which include increases in police and street department personnel, show shortfalls of $141,843 and $212,953, respectively.

Town leaders are likely to choose the middle budget proposal, which totals $1,940,473, McHargue said. That plan would add two full-time and one part-time police officers and two part-time street department employees, he said, but would not include any cost-of-living or merit pay increases.

Sylva Police Chief Jeff Jamison initially requested four more officers, McHargue said, and all four are included in the third proposal, which totals $2,011,583.

Should Sylva leaders approve the $1,940,473 budget, it would necessitate a tax increase of at least 7 cents, McHargue said. Based on current property values, each 1-cent tax increase generates $20,000 for town coffers.

Sylva's current tax rate is 40 cents per $100 valuation, which means the owner of a house valued at $100,000 pays $400 per year.

If increased to 47 cents, Sylva's tax rate would be among the highest of similar-sized area towns, McHargue said. Only Bryson City's rate, 50 cents, would be higher. Both Waynesville and Weaverville have rates of 43 cents, while Maggie Valley, Franklin and Fletcher pay 39, 36, and 27 cents, respectively. The $1,940,473 budget proposal does not include any reimbursement to the town's UDAG funds, McHargue said, though paying back that money was deemed a priority at a January work session.

When board members decided three years ago to fund repairs to the town-owned swimming pool from UDAG money, they passed a resolution stating their intent to reimburse the fund.

The dwindling status of UDAG funds could affect the town's decision to continue to fund Sylva Partners in Renewal, McHargue said.

"The board is concerned that the UDAG balance is being drained," he said.

Given that concern, McHargue said he expects the board to look "long and hard" at a contribution to SPIR this year.

Annual contributions to the downtown revitalization group, which have been $20,000 per year for the past several years, typically have not been included in the budget but have been allocated from UDAG funds, which are earmarked for economic development.

No budget decisions are expected until results from a personnel study are available later this month, McHargue said.

Town leaders voted in December to contract with the N.C. League of Municipalities for a personnel study that would include a recommeded salary schedule and updated job descriptions for town employees.

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