City may be forced to trim thousands from budget

By AMY SATTERWHITE / Staff Reporter for the Southern Standard

DAVENPORT

McMinnville’s total state-shared taxes amount to just under $1.5 million, and city officials are already looking at ways to combat less revenue by revisiting a referendum on the local option sales tax.

City leaders said they fear the state will withhold around $126,000 in Hall Income Tax from McMinnville to help solve the state’s budget woes. According to the Associated Press, other cuts are also being considered — for example, a 9 percent across-the-board cut. According to city records, that could shave another estimated $135,000 off McMinnville’s bottom line.

If both scenarios prove true and the city lost more than $260,000 in state-shared taxes, the city would have to raise property taxes by about 17 cents to make up the difference.

“To jump it 17 cents is quite drastic, based on tradition,” Mayor Royce Davenport said, adding the state’s withholding of the local revenues would put a strain on everyone.

“This puts pressure on all local governments across the state to either make cuts or raise property taxes and this is also a reason for us to consider a referendum raising the local sales tax,” he added of asking city residents to raise it from 2 percent to 2.75 percent.

City officials have also worried about expansion of a state sales tax where local funds can be sent to the state and say approving a higher local option tax now may help keep those dollars at home.

They are pinning high hopes on local approval of the increased local option sales tax as a way to offset some of the potential losses, but cannot predict exactly what will happen.

The Board of Mayor and Aldermen has yet to vote on the issue; however, the Finance Committee has taken preliminary steps to pursue another local option sales tax referendum.