I suspect everyone is acquainted with the budget/tax issue facing the city.
On first reading, the 2010 budget required a 1.5-mill increase in property taxes, which was approved on a 4-1 vote. That amounts to an increase of $72 a year for the owner of the average residential property in the city.
(The median residential property value in the city is $48,000. Each mill is one-tenth of a cent. To find how much a 1.5- mill real estate tax increase would come to on any specific property, multiply the assessed value by .0015.)
The 2010 budget-buster is an increase of about 34 percent, or roughly $250,000, in health insurance premiums. The city is also seeing a slight drop in revenues from both real estate taxes due to a decline is assessment value and from the Local Services Tax, the $52 charged everyone who works in the city.
The proposed 2010 budget as given initial approval does nothing more than marginally maintain the current level of city services and activities. The 1.5-increase in real estate taxes balanced it on first reading as is required by law.
Everyone on council found the budget and tax increase troubling. And I can tell you with certainty that no one on council relishes the prospect of a tax increase. First of all it affects each of us just as it does every other property owner and to a person we have a deep understanding of the financial difficulties faced by many of our citizens. Secondly, I’m reasonably sure no one on council looks forward to the anger and criticism that will be directed at them if there is a tax increase.
I suspect each of us has different thoughts and approaches to dealing with the budget challenge. We will need to find a consensus, or at least a majority will.
It is easy to say “cut costs,” but it is much harder laying out a reasoned and successful way to do that.
My best guess is we might have some success in doing a bit of paring here and there and with the help of the city’s workforce be able to reduce our expenditures a bit and the amount of any tax increase, but unless we significantly reduce services there is no option but a tax increase. Already many of the long-term needs of the city are not being met, with street paving high on that list.
People live in the city for the services and amenities we offer – certainly I do. But as Councilman Neil McElwee pointed out our real estate tax rates can make us less competitive in attracting new residents and businesses. It is the space between the rock and the hard place.
Furthermore, I think we owe it to our new city manager to provide him a “status quo” budget and operations so that he can fully evaluate how we are doing things and come up with his own long-term strategic recommendations. Moving rashly now to cut costs would now fully allow him that opportunity.
Although I’m personally committed to maintaining our services and amenities, that does not mean I’m opposed to finding ways to do that more efficiently and less expensively.
Unfortunately, our financial inability to undertake major capital investments makes it that much harder. If we had a lot of capital money, there are quite a few things that could be done to improve efficiencies and lower long-term operating costs.
Beneath all our local budget woes, which are identical to cities across the state, are structural issues that can only be addressed by the state legislature. I don’t expect that to happen anytime soon.
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6 comments:
Perhaps city employees could pay more of their health insurance premiums?
We have asked the bargaining units to contribute more to the health insurance. Negotiations are continuing.
However, it is only fair to note that in somewhat of a backdoor way they do. As health insurance premiums go up, their negotiated raises go down.
So there was going to be a hike of 1.5 mills but now the new city manager comes to the rescue and trims it by a third.
This was a setup! Go for a bigger increase and them miraculously cut it back.
Far from it.
And frankly, that is a bit of a cheap shot.
The budget presented and the 1.5 mill tax hike presented on first reading was, as explained, keeping everything exactly the same for 2010 as it was in 2009. Council asked that the administration see if there could be some trimming in hopes of reducing it a bit. That's what happened.
The timeline required approval of a budget and accompanying tax hike on first reading.
My wife and I are looking at an older home to purchase in Oil City. We are able to live anywhere. We love the house and so far, we like the town. The high property tax is our greatest concern and may prevent us from buying there. Why are they so high?
Tom,
First, I do hope you and your wife choose Oil City. There are many reasons to do so.
In Oil City you have real neighborhoods, which usually is not the case in the outlying townships, which are simply structured and developed differently. I like neighborhood life.
I like being able to walk or ride my bike if I choose to the library, pharmacy, etc., which is possible in town.
Now, to your core question: Why are our taxes higher.
First, we are a full service community: with police, paid fire/emergency medical, and related services. There is no 20 minute wait for a policeman or paramedic and firefighters will be there within a couple of minutes if needed. Our taxes are no higher than any of the neighboring municipalities if you remove those full service responsbilities.
In addition, we have a wide array of recreational and cultural services, including the Oil City Library.
Our core cities, including Oil City, perhaps notably Oil City, support many of the regional assets that are a benefit to everyone. That's not fair, but that is the way it is.
If you look at the total costs of living in the city vs the neighboring municipalities -- factoring in not just taxes, but all other costs such as water, garbage, sewage, transportation, etc. -- Oil City is really no more expensive. Factor in the added services and I think Oil City is a bargain.
Call me.
John
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