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News Town of Franklin serves up double tax increase

Board members along with Town Clerk Janet Anderson and Town Manager Summer Woodard met at Town Hall early on Saturday morning to go through the budget for the upcoming fiscal year. A proposed two cent tax increase drew the most discussion from the meeting and will be mulled over until the June 2 Board of Aldermen meeting.State blamed for town’s decreasing fund balance.

When a proposed town budget was distributed at last month's Franklin Board of Aldermen meeting, it contained an interesting proposition in the manager's budget message concerning the fiscal year 2014-2015.

“A modest tax increase is recommended to adjust the ad valorem tax rate to twenty-six cents ($0.26) per one hundred dollars ($100) of valuation,” said then-town manager Warren Cabe. “This will allow a modest transfer from undesignated funds to be used for balancing the budget while maintaining a healthy and sustainable fiscal future for the Town while still accomplishing several projects.”

But by the end of Saturday morning's budget work session, the one cent increase had been forgotten and instead, a two cent increase was being floated by Mayor Bob Scott.

“For many many years, the county and town have bragged about having such a low tax rate and we have deferred things and deferred things to the point that now, I'm a little concerned about the economic development of this town,” said Scott.

The original one cent increase that Town Manager Summer Woodard described would generate an extra $60,000 per year while a two cent increase would raise that amount to $120,000.

As described by Scott, a person who owns a piece of property in the city limits that is worth $1 million would see an increase of $20 per month.

“I really don't have a vote on this but I would like for the board to seriously consider the economic benefits for the town,” he said. “Most people when they look for a place to move to and to live in, they look at water and sewer, the recreation and the livability of a town.”

As board members like Farrell Jamison pointed out, the town will most likely have to change the tax rate next year after the county completes its revaluation.

“On the average it's sounding like a 27 to 35 cent increase on the millage,” he told the board. “If it's like past revaluations, you don't lose as much on properties in the city as much as you do in the rural areas so we may see very little change.”

The discussion of the tax increase led the board members to review the town's fund balance — the accumulation of revenues minus expenditures, or the town's “safety net.” According to Town Clerk Janet Anderson, at the end of the 2013-2014 fiscal year on June 30, the town could break even or end up dipping out of that balance to fulfill expenditures.

“Right now it's looking like we're going to spend out of the fund balance or maybe break even,” she told the board. “We're really down on the fund balance.”

The fund balance has decreased over the last several years and in the upcoming year it looks to be at $170,000 for the general fund while $450,000 is from the Powell Bill which is state appropriated funds for transportation costs.

“I'm all for a tax increase,” said Alderman Joyce Handley. “I don't think it's anything to be proud of that we have the lowest tax base when there are things that need to be done. I'm not sure about two cents but I was for the one cent.”

The budget that was put together by Cabe before leaving his position was atypical, said Woodard.

“This is a budget where when it was looked through, it wasn't looked through for ways to save and therefore some of the things that were asked for didn't get funded,” she said. “This was a budget that things didn't get funded because there's no money.”

Though a tax increase would likely be an unpopular move as pointed out by most of the aldermen, it could be uncertainty on the state level that has brought the officials to this point. As Anderson describes, dealings with state entities have become unclear.

“The best possible thing is that when we get more revenues from the state, we may break even,” she said. "They've owed it since we spent it, but things have changed. The Rural Center isn't even in existence anymore. Now it's the Department of Commerce.”

The budget will be voted on at the June 2 meeting which will include a public hearing for anybody who may want to share an opinion. Leading up to that meeting, board members will be mulling over the proposal.

“In anticipation of the revaluation, if the board were to approve a tax increase, we don't need to spend that added revenue,” said Aldermen Billy Mashburn. “We don't need to budget it. It needs to be put there and left there. If we spend it then we're just backing up.”

The next town board meeting will be held June 2 at 7 p.m. at the Franklin Town Hall.





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