City Budget Update: Council votes to use general fund to avoid tax hike
The Merrill Common Council voted Tuesday night to offset a $408,000 levy increase by taking money from the city’s general fund. The move will mean no city tax increase for 2014.
In making the motion to use the general fund transfer, Alderperson Anne Caylor noted this is a one-time fix for the budget. The council needs to start planning for long-term budgeting, she added.
“At no point did the taxpayers give us a blank check to spend their money,” Caylor said. “We’re already at one of the highest tax rates in the state.”
The budget the council was faced with coming into Tuesday night’s meeting would have raised the city’s tax levy by 7.1 percent. The $408,018 budget increase is all in debt service. The city has borrowed about $7 million over the past two years, including $3.5 million for the new fire station. The tax increase would have raised taxes on a $75,000 home by $67.
Alderman John Burgener reminded the council that they knew the tax impact of the fire station before they voted unanimously to approve the project.
“We all voted unanimously to build the new fire station. Now that we have to pay for it, you’re changing your mind,” he said. “I think the general public expected that $50-70 tax increase.”
Mayor Bill Bialecki cautioned the council against spending down the general fund to balance the budget.
“Where are we going to get the money to pay back the general fund?” he asked.
The council made a number of cuts to the budget during Tuesday night’s meeting.
*A half-time position in the Water & Sewer Utility office was removed from the budget. The position is currently vacant.
*A wage increase for the utility clerk was erased, saving $2,010. The employee would still receive the same raise as all similar employees, but would not get a bump in pay grade.
*A street lighting project on Champagne Street was cut, saving $50,000.
*Planning costs for the extension of East Sixth Street to meet Pine Ridge Avenue were cut, saving $150,000.
A number of projects in the city’s Tax Increment Financing Districts (TIDS) were removed from the budget. While those projects are not factored into the city’s tax levy, some aldermen were concerned that shortfalls in TID revenue would have to be covered by the general fund. TID budget cuts included over one million dollars for site acquisition, demolition or redevelopment in various parts of the city.
Bialecki objected that taking away that funding option undermines redevelopment efforts that are underway.
“If you take this out, it’s really going to cripple us,” he said.