BRADENTON -- The City Council on Wednesday debated the same issue that people are trying to solve at kitchen tables across the country: How do we pay our bills in this economy?
While the amounts might be on far different scales, the questions are the same. As expenses like health insurance rise and the amount of money coming in continues to shrink, how do you meet the obligations you have?
The city has more options than the guy out looking for a job and council members debated them all. A couple of the options were the same ones people face at those kitchen tables: Do nothing and hope a crisis doesn’t happen, cut expenses or go into debt and hope that there will be enough money in the future to pay it off.
But government has one thing most people don’t: the option to raise taxes.
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While the city may be able to get by for another year by neglecting some needs and doing nothing, Carl Callahan, the city’s chief of staff, said that it won’t be possible beyond next year.
He said the city’s general fund has fallen over the years from $38 million to $36 million to $33 million this year. Callahan said the city is $1.7 million short of making its budget. While he can trim that amount, he said, to $30 million, the city will have to make difficult decisions about how it will meet its obligations.
“This is a never-ending battle,” he said. “Right now we’re just chipping away at the problem.”
The city will lose $600,000 in grants for police officers and cars next year, he said. It has already put off some capital improvement projects and hasn’t given employee raises for several years.
“Without a different source of revenue, we’re in trouble,” Callahan told council members.
But before Callahan could get to the options, Councilman Bemis Smith warned that he didn’t want to consider one option.
“The county is risking being politically annihilated when looking at raising taxes when the world is in this situation,” he said.
Smith said he would rather issue general obligation bonds in anticipation of an economic recovery and rising property values. He also suggested moving to a special assessment for the fire department, similar to fire districts in the county.
But other council members weren’t so quick to rule out possible increases in the tax rate.
“If we use that philosophy, why not just raise taxes?” Councilman Gene Gallo asked. “We’ve got a good fire department and we need to keep them and we need to fund them.”
Gallo, who described himself as a “common sense thinker,” said that the city is selling a “product” in fire safety and public safety and that the cost of producing that product increases.
“You can’t change the same amount for five years,” Gallo said. “If you show why you’re raising taxes, people don’t mind.”
But Smith said that people don’t have an option to forgo buying city services, “it’s not an option” so the city has a responsibility to look for ways to cut costs.
Smith said that by looking at different options, cutting services to the minimum, taking out loans or moving to assessments, the council is giving taxpayers a say in the decision about the services they want and whether to fund them.
“Whether you call it an assessment or a tax, you’re still raising revenues,” Councilman Harold Byrd said. “If it’s an assessment you know where the money goes, that’s the only difference I see.”
Callahan suggested looking at a roll back rate, which in effect raises the tax rate but brings in the same amount of money from taxpayers based on the lower property assessments.
“There’s no sense to do an assessment if you’re willing to raise taxes to pay for those services,” Callahan said.
The decision the council must face as it begins the process of considering the budget, Callahan said, is deciding whether it wants to give lesser service and charge the same amount or to raise the tax rate and give the same level of service.