City Council members denied Mayor Tom Henry's request Tuesday to raise property taxes, even after he offered a compromise on half of the hike he wanted.
The mayor had proposed a $140.million General Fund budget for 2013 that included both the 2.8.percent property tax increase the state is allowing for next year and the 2.9.percent increase it allowed for this year that the city didn't take. When it was clear he wouldn't get the full 5.7.percent he wanted, on Monday he offered to take just the 2.8.percent and make up for the other with interest from the money from the lease and sale of the city's old electric utility.
The council took him up on his offer of using the interest, but denied both tax increases.
"We're going to have to evaluate the impact of this," city Controller Pat Roller said. "If there are any unforeseen issues, it's going to be difficult."
The mayor has argued the approximately $75.million from the electric utility, called the Legacy Fund, should be used for capital projects that could help transform the city and benefit all the citizens, such as the Harrison Square project with its new downtown hotel, ballpark and mixed-use building. He opposes using it for day-to-day spending.
But council members said it doesn't make sense to raise taxes when that money is available, especially when such a small percentage of it – or even the interest – could prevent a tax hike.
"I think we should resist any tax increase in this economy," said John Crawford, R-at large. "I think we have much better credibility going to the citizens next year if we can say we did all we could this year."
Crawford's proposal to keep the property tax levy the same as this year's passed 6-3, with members John Shoaff, D-at large; Glynn Hines, D-6th; and Marty Bender, R-at large, voting "no."