State cuts could hurt city services: McMinnville may lose $2.4M
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A proposed amendment to a bill that would have made all state-shared taxes subject to annual appropriations happened so fast, there was no time to even talk about a contingency plan locally, City Administrator Herb Llewellyn said.
The amendment would have given the General Assembly the power to decide how much, if any, money to share with local governments.
“Last week, within 24 hours, it was an idea. It went through committee and the floor voted on it to take our taxes. There was no way to effectively talk about it. It was like one day, ping, so we’re taking this very seriously,” Llewellyn said.
Even though the amendment was defeated, the fact it was even debated is worrisome to Llewellyn as an administrator responsible for preparing an annual budget.
About one-fourth, or $2.4 million, of the city’s $9.9 million general fund is supported by state-shared taxes. The general fund allows the city’s departments – police, fire, parks and recreation, codes, public works and administration – to operate.
If that amount was ever withheld, the city would hypothetically have to raise property taxes $1.58 to keep the same level of services, which would make the city’s property tax rate $3.52.
Finance Committee Chairman Billy Wood doesn’t foresee that scenario becoming reality and said if all the state-shared taxes were ever withheld, he supports cutting services.
“There is no way the state legislature would cut state-shared revenues. Politically, it would be a catastrophe for them,” Wood said. “They’re using it as a scare tactic. I’m strongly anti-tax and if some form of revenue punishment is rendered by the state, the city will be forced to undergo massive cutbacks – and I mean essential services – because people are not going to stand for another tax increase.”
As far as what services might be cut, officials said they haven’t gotten that far realistically and it’s hard to predict, in part because proposals for solutions on the state level have changed. However, if something like codes enforcement was eliminated, the elimination would cut less than $200,000 from the budget.
As far as the much-debated Downsizing Ongoing Government Services (DOGS) budget, that scenario would more seriously impact the county and local education than it would city government.