Council members went back and forth on whether a tax increase was appropriate given the current state of the economy and the fact that the city already has balanced its budget for the fiscal year.
Rinthen said if the council fails to pass an increase, the city will be left without many options if it encounters a difficult financial scenario. Property tax rates have remained the same since 2005 despite increasing costs and other issues, like the consistently increasing homestead exemption that discounts the real property tax of older residents, he said.
The homestead exemption is growing from $33,500 to $37,500 this year, which is offsetting any gains in revenue the city would have seen from new property entering the city, Rinthen said.
“We’re going to have to go up on something or we’re not going to be able to function,” he said.
Councilman Bret Baierlein proposed putting off the decision until January or when the council is deciding the city’s budget for the next fiscal year.
Rinthen said for any change in the property tax rates to take effect this year, the council must make everything official before Sept. 15, including advertising the new rates in the local weekly paper. If the council puts it off, it will be a long time before it sees increased revenue, and it will make the budgeting process difficult, he said.
Rinthen estimated the city has seen $30,000 less in tax revenue since 2005 because it has not increased its tax rates, and suggested that amount is comparable to the salary for a police officer and could have saved one of the officers the city recently laid off.
Councilman Leonard Smith called the increase “minuscule” and said it could practically be considered revenue-neutral after accounting for inflation and things like the homestead exemption.
Some council members seemed apprehensive about holding a public hearing, which is required by law if the council votes to take the maximum 4 percent increase, but councilman Chris Davis said he was willing to vote for the first reading of the increase in order to see what kind of response it elicits.
“I’d like our citizens to come talk to us,” he said. “I like the heat.”
Davis eventually made a motion to approve the first reading of the increase, with the understanding that the council could reduce or eliminate the increase following the public hearing on the issue.
After an extended silence when it appeared no one would second Davis’ motion, Smith provided the second. Council members Jesse Wagoner and Maggie Morris voted yes with Davis and Smith while Baierlein voted no.
Councilwoman Brenda Powers abstained from the vote. When Rinthen said council members are required to explain why when they abstain, she said, “You know me, Don. People can’t afford it.”
As council members in 2006, Rinthen and Wagoner both participated in discussions on the same property tax increases being proposed. Rinthen voted in favor of the increase and Wagoner opposed it. The 2006 council eventually voted down the increase.
Lancaster council to discuss Sunday sales
Near the end of Monday’s Lancaster City Council meeting, Councilwoman Maggie Morris requested the council discuss the potential of legalizing Sunday alcohol sales in Lancaster at its regularly scheduled meeting in September.
Morris said she wasn’t calling for a vote or saying it needed to happen.
“I just want to talk about it,” she said.
The regular September meeting will be 7 p.m. Sept. 7, due to the Labor Day holiday.
IF YOU GO
The Lancaster City Council will hold a public hearing and special called meeting at 7 p.m. Aug. 16 in the city council chambers of city hall on the issue of increasing the city’s property tax rates. The council will discuss the possibility of legalizing Sunday alcohol sales at its regular meeting at 7 p.m. Sept. 7.
