Last Tuesday, the Council voted to approve the Operations & Maintenance Budget and a higher tax rate: seven for and one against. I can explain the vote against.
 
A majority of my posts these last few weeks have dealt with the budget and the considerations around its adaption. I've demonstrated that we are taxed higher than most other cities, that what we pay more for services than most, and that we will have tremendous challenges in the next budget.
 
I've also demonstrated that the tax rate tied to the Operations & Maintenance Budget has remained constant for four years but our expenses for Debt Service are rising, pushing our total tax rate ever higher. Because we are assuming debt faster than it is being retired, increases in debt inevitably lead to more taxes to cover the payments on principle and interest.
 
Our challenge increases because we have a lower median household income than most of the cities with which we compete and almost 60% of our tax base is declining. Total property growth last year was about 2% and our population growth was about 2%.
 
All these factors exemplify that investment in our community is currently not sufficient to sustain the tax base. The solution is to keep raising taxes, which I contend will keep making our challenges ever more difficult, or we need to focus our efforts and attentions on growing the value of the city, growing the value of our tax base.
 
Because I advocate the latter, I have to oppose raising the tax rate. If we Grow the City, the increased values will generate more tax revenues without raising taxes and without making it harder to compete with other area cities for new businesses, new residents, and new jobs.
 
Our city staff did a very good job, an excellent job, this year analyzing the data to see that we would have a strong drop in tax collections and to start preparing for some of the challenges faced this year. They polled the Council for politically sacred cows and to see if there was the political will to do what was going to be necessary: cutting expenses to match the lost revenues. At each step, the Council signaled a green flag.
 
The budget passed by the Council supported the city manager and his staff's efforts. It didn't always look like it was going that way. There was some foot-dragging.
 
I supported the city manager's efforts. I'm pleased that we've been able to keep the O&M tax rate constant, now for the fourth year in a row.
 
I've heard people say the tax rate has to rise to keep up with inflation. Not true. Generally, expenses might be rising but so are tax collections as evaluations rise. The tax rate is a percentage — if values increase, so will tax collections.
 
Even though the O&M tax rate has held steady for four years, the combined budget has risen over $100 million in the same period! The General Fund has risen 11.4% over that period even with an unchanging tax rate, and that's with a $169,500 drop this year.
 
Clearly, the best way to gain greater tax collections for city operations and for improving the city is to grow the value of the city. High tax rates strangle investment and retard efforts to Grow the City.
 
I felt the Council could have tried harder to prevent the tax increase that was forced by higher debt associated with the expanded Capital Improvement Program passed earlier in the year. Council member Darren Lathen and I tried to encourage more restraint so we could avoid the tax rate increase. I offered a $6 million cut in District 1 to get the ball rolling. There simply wasn't a reciprocal spirit.
 
I voted against the 2008-09 Proposed Budget.
 
We know the budget next year will be harder. I'm very afraid that a tax rate increase may be the only responsible action next year. I felt we needed to do everything we could this year to hold the budget down as we prepare for the next one, and holding the rate gives us our best chance of attracting the investment that would augment collections.