Some Roswell residents are accusing the city of trying to slip through a tax increase in next year’s budget, and they want city leaders to be more open about it.
The issue has split the City Council over whether homeowners are due a tax break or whether extra savings from the city’s debt payments should go toward long-needed projects.
By a 4-2 vote, the City Council gave preliminary approval to the $105 million budget last week. A final vote is scheduled for May 29.
Roswell has raised the overall property tax rate only once in the past 24 years. That was 10 years ago, and it didn’t last. The rate has crept downward since then.
At issue is about $5 million the city will save next year in payments on its old debts — bonds approved by voters years ago that are now paid off. The proposed budget takes some of that savings, about $1.7 million, and shifts it to general operating costs, particularly road maintenance. The rest would be held in the city’s debt service reserve to pay off another bond next year.
If the savings were passed on to homeowners, it would cut about $40 off the tax bill of an average house valued at $250,000.
Mayor Jere Wood insists there is no tax increase, and the city has anticipated increased expenses for some years with the rise in population and the advent of new health care laws. He said critics are twisting the numbers.
“I call this ‘new math,’ ” Wood said. “The math that you and I are used to is that if the millage rate does not go up, there’s not a tax increase.”
But not everyone agrees.
Councilman Kent Igleheart called the spending plan a “stealth tax increase,” and he and Councilwoman Betty Price abstained from the vote.
Igleheart said the city should be more open about why it is keeping the property tax rate the same as in prior years, 5.455 mills.
“We’re going to take that money that was specifically set aside for bond payments, and we’re going to shift it for ongoing operations,” Igleheart said. “I liken it to the Ga. 400 tolls that were supposed to end after the road was paid off.”
Price said she worries that adding more money to general operations will raise the reset level on standard services and make it difficult to trim future budgets. Price also said the budget process should include more resident input before it comes before the council.
Councilman Rich Dippolito, the liaison to the city’s Finance Department, said the savings from the debt will go to a mix of things the city has had to put off during the recession as tax revenue has fallen.
Close to half the money will go to maintain streets, he said.
“What’s important is that our operating expenses over the past five years have decreased, even with the small increase we’re having this year,” Dippolito said. “To me that’s the best measure of whether the city is being efficient with its funds.”
Resident Lee Fleck, who has spoken repeatedly against the budget, said city leaders are steering the city toward future tax increases by slowly spending too much and depleting reserves.
“The governing body, over the past five years, has authorized burning through $35 million in excess reserves, thus eating away at the financial foundation of the city,” Fleck said at a public hearing Monday.
But the city disputes that scenario. Finance chief Keith Lee said reserves for 2009 totaled $35.9 million. Reserves for 2014 are projected to be $13.8 million.
The spend-down, he said, was for planned one-time projects such as the round-about where Grimes Bridge and Warsaw roads meet Norcross Street, and the midtown streetscape on Alpharetta Highway.
About the Author
