With all signs pointing to a potentially brutal budget process for the next Metro fiscal year, Metro Finance Director Richard Riebeling told The City Paper all options are on the table, including a property tax increase.
If in fact Mayor Karl Dean does propose raising taxes for the next fiscal year that begins July 1, he’d be in good company. Every mayoral administration since the inception of Metro government in 1963 has raised them.
The subject is on the minds of Metro Council members and others because of, among other gloomy forecasts, an estimated $35 million shortfall for Metro schools for the 2010-2011 fiscal budget year. Because its reserve funds are sufficiently tapped, that would mean the district possibly slashing its $620.7 million budget if the mayor’s office and Metro Council can’t find a revenue source to make up the difference.
When asked if increasing taxes is an option, Riebeling said, “When you go into the budget process, everything is on the table.”
Riebeling said he’s met with school officials and believes the $35 million forecast may actually be on the high side –– a projected $12.4 million in additional employee pension funds, for example, is probably a little off.
Though Riebeling acknowledged the district might have to “do some things differently or do without some things,” he said, “it’s too early to tell,” and his intention is to make sure schools don’t have to make substantial cuts.
“Clearly that’s my goal,” Riebeling said. “Cutting schools by $35 million is not something that we’re looking forward to doing. I think we’ll be able to get there.
“You’ve got to look at the totality of everything in the budget,” he added. “The mayor’s commitment is still with schools, and that’s not going to change.”
Metro Council Budget and Finance Committee Chairman Ronnie Steine said there simply are no new revenue streams around and that “they’d have to be generated from somewhere.”
One option would be for Metro to institute a 56-cent property tax increase, the same amount by which the property tax rate was reduced after last year’s every-four-year property reappraisals. State law dictates that reappraisals be revenue-neutral, so the rate is adjusted downward to ensure the city brings in no more money than it did the previous year.
Steine said he hasn’t heard anyone from Dean’s administration mention that as a possibility at this point in time, though the idea is floating around.
History shows administrations typically recommend a rate increase to Metro Council during reappraisal years. In four of the last five reappraisal years, the certified rate has been increased — by 67 cents in 2005, by 91 cents in 2001, by 54 cents in 1997 and by 63 cents in 1993.
During Dean’s campaign in 2007, he said he had no plans to raise property taxes, but he stopped short of a first-term pledge against doing so.
“I am against any increase in property taxes,” Dean said then.