Palmetto narrowly votes to keep millage rate flat

As soon as the millage rate came up for discussion at Monday’s Palmetto City Commission meeting, Commissioner Tambra Varnadore quickly moved to keep the millage rate flat for the 2016-17 fiscal year, which begins Oct. 1. She was joined by two supporting commissioners for a 3-2 vote.

Varnadore had vowed through budget discussions that she would not support a hike in the millage rate, but was absent at last week’s lengthy budget discussion where a recently completed employee salary study added $300,000 to the city’s already $228,000 budget shortfall. The discussion then led to the possibility of raising the millage rate for the second straight year.

But Varnadore was in no mood for tax-hike discussions. Commissioner Brian Williams and Vice Mayor Harold Smith quickly joined Varnadore’s motion and a vote was cast. Williams noted that no opportunity for discussing the motion had been provided.

“I didn’t need discussion,” said a determined Varnadore.

The two dissenting votes came from Commissioners Tamara Cornwell and Jonathan Davis who said that perhaps a cushion was needed for staff as they went back through the budget to find additional cuts. Hopefully, they said, those cuts would get the millage rate flat by September’s final budget hearings.

“The message here is to hold the line,” said Cornwell. “But can they do it? I need to see what it is they have to cut and that’s the unknown. I agree we need to hold it and send a message to our residents that we are doing our best,” but noted she was more comfortable giving staff a “safety valve.”

Varnadore said, “If the citizens of Palmetto have to live within a finite budget, then so does the city. It’s not difficult to accomplish. My experience is that when you give a cushion, it rarely comes back down. We can’t increase the millage every year to meet needs. I have every confidence we can get there and do not need a safety net.”

Monday’s vote means the millage rate can only be brought down and cannot be raised moving forward. It will remain flat at 5.9671. A mill is $1 for every $1,000 of appraised property value. While they voted to keep the millage rate flat, the city will see additional revenue from rising property values. By state statute, if the city doesn’t decrease the millage rate to match the prior year’s revenue, it’s still considered a tax increase.

City clerk Jim Freeman said staff has already anticipated the commission’s wish and have cut more than half of the deficit, leaving $216,000 to overcome.

“There are one-time capital expenditures that can be paid out of the reserve,” said Freeman. “We like to have 3 to 6 months of reserve funding and we currently are well within that threshold of a projected 5 months, so there is some opportunity to identify some of those one-time expenses with reserves and still be within our threshold.”

Mayor Shirley Groover Bryant said the city would rely heavily on the success of November’s half-cent sales tax vote, which would bring about $1 million a year of new funding into the city.

“If we had gone with a tentative quarter mill increase, my intent was to have staff move heaven and earth to get the millage flat for the long term,” said Bryant. “It’s imperative that half-cent sales tax is successful. We have a lot of needs and even our police department would fall under it. A half-cent sales tax is most equitable because everyone, including the tourists pay for it. We’re talking about the quality of our parks and streets.”

This story was originally published August 1, 2016 at 8:57 PM with the headline "Palmetto narrowly votes to keep millage rate flat."