March 14, 2010
BUDGET QUANDARIES: City Fee Increases Pondered by Council
By Tony Rutherford
Huntingtonnews.net Reporter
Huntington, WV (HNN) – How to raise revenue to prevent city services from sliding backwards? Huntington City Council confronted the bear early Saturday morning, March 13. The circumstances mean many citizens and businesses will not be happy campers. From the meeting, it’s not will city fees or taxes increase; no, it’s a matter of which ones.
At the first Saturday budget session, council voted to restore furloughs and cuts to the Huntington Police Department unanimously taking a stand that we cannot advertise the town is again under staff on law enforcement. The 2002 cutbacks led to the brisk movement of out-of-town drug dealers into a city where previously violent crime was the exception, not a daily pattern.
Grim statistics and fears mounted during the Huntington Fire Department presentation. Cutbacks could cause the city to lose its insurance rating based on response time and staffing. Layoff firefighters, say, hello to increase fire insurance premiums.
Councilwoman Frances Jackson , who lives in the high rise opposite Applebee’s, recalled a nine death fire tragedy in her neighborhood --- Emmons Junior. She speculated, how would the death toll have been affected if HFD was not at its current staffing levels?
“Is there grant money out there you could tap in to,” asked council woman Sandra Clements? Fire Chief C. Craig Moore responded, “ Unfortunately, grant monies for staffing, equipment and facilities is much more difficult to come by. People that are successful at doing that have professional grant writers on their staff. I have myself and an administrative assistant. We’re taxed. There may be some money, but I do not at this time have the resources to find it.”
Council Finance Committee Chairman Steve Williams stated, “None of us like where we are heading. But as we deliberate and communicate to the public, these revenues are all that we have absent any other proposals.” Williams lamented that the administration had not yet made any detailed revenue suggestion analogizing, “We are driving down the road, but the bridge has not been constructed. We will have to make a decision to construct a bridge.”
Williams continued that in the two weeks prior to sending the budget to Charleston, “we would be able to make a determination to either raise a user fee, enacting an occupation tax, a sales tax, or whatever. We have some critical path management to do … of several things happening simultaneously to get to an end point. I suggest we continue working with this budget as thought the revenues are what they are and demonstrate how dire the circumstances are and what we would have to give up if we don’t make some other decisions. At your direction, we’ll have the finance committee receive proposals from the administration as to alternative revenue sources, then we would begin having public hearings and begin deliberations to come back to council and make a judgment.”
Mayor Kim Wolfe indicated that the home rule occupation tax could be placed on the table and Ashland, Ky. has a favorable experience with its tax.
“To make our city safer and cleaner, it will take additional funds. I am convinced the public will come back and say that it was a difficult but right decision.”
The Mayor referred to advice from an Ashland councilman who stated that Huntington’s leaders will hear numerous negatives regarding an occupation tax. “You’ll hear that business will move out, people won’t come [to the city], but we have seen business grow, we’ve seen more activities in our city. Why?
{We] provided for our public the services that they wanted. It was a fair and equitable tax upon the people. You make a little more, you pay a little more. It’s not an easy decision, but to keep our citizen’s safe (police and fire) in an environment that all of us are looking for, it’s a decision that would be the right decision. A year or two later, we would see the positive correction of what’s going on,” Wolfe stated. “I would encourage that we look at [estimates on what an occupation tax would bring in], understanding that we would do away with the user fee and make adjustments in other areas that would reduce costs to those less able to pay those fees.”
Director of Finance and Administration, Brandi Jacobs-Jones, stated , “if you implemented a one percent occupation tax, you would bring in less than $10 million dollars. And, you would reduce the city service fees and municipal fees to the base rate, you would generate an additional $4.3 million dollars. That $3 to $4 million dollar in excess of what we are generating in revenue.”
Ms. Jacobs-Jones explained that the “revenue neutral” promise came from the previous administration. “In checking with the state municipal league and the Home Rule Board, it does not have to be revenue neutral. We would have to repeal the user fee.”
Runyon cautioned, “That is an estimate… and it’s a full year estimate. Anything that this council would do could not be put in place prior to July 1. The way we collect our revenue, it runs a quarter behind. So, the contemplation would be 75%.”
Houck surmised, “We’re going to have to work with the budget and income we have now. There is not going to be a direct infusion of finances between now and July 1?”
“I would say that is correct,” Runyon responded.
However, the pilot home rule granted authority for Huntington brought a significant possible disruption before the governmental body --- nearly every action proposed has been met with either a legal challenge or a threatened legal challenge. In fact, the West Virginia legislature on Saturday, March 13, passed components of fire debris removal laws that required a state fix, not one from one of the pilot municipalities.
Recalling last year’s user fee increase to balance the budget, councilman Nate Randolph called it “a bad idea that we should not do again this year. We need to consider a current revenue stream to remain static,” alluding to occupation tax possibilities. However, the process for potentially implementing such a city tax requires hearings and is not expected to be a popular alternative.
At the meeting, in addition to a user fee increase, a one cent increase municipal fee (fire) was mentioned as a means to eradicate the short fall in that department. The user fee would benefit the police and streets.
In a means similar to the restoration of the police funds, councilman Scott Caserta was successful in passing a motion that would restore fire department cuts. The measure passed 7-2 (Steve Williams, Sandra Clements voted no; Teresa Loudermilk and Jim Ritter were absent.)
Randolph postulated possibility sending the unacceptable austere and furlough laden budget to Charleston as a “worst case scenario,” then, once passed, revisiting the spending plan. Council would have until July 1, 2010 to pass revenue measures to make restorations.
“Even though we file this [budget] in Charleston in a few weeks, this is for the fiscal year starting in July, so we can revisit and refile that budget at a later date.”
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BUDGET QUANDARIES: City Fee Increases Pondered by Council
By Tony Rutherford
Huntingtonnews.net Reporter
Huntington, WV (HNN) – How to raise revenue to prevent city services from sliding backwards? Huntington City Council confronted the bear early Saturday morning, March 13. The circumstances mean many citizens and businesses will not be happy campers. From the meeting, it’s not will city fees or taxes increase; no, it’s a matter of which ones.
At the first Saturday budget session, council voted to restore furloughs and cuts to the Huntington Police Department unanimously taking a stand that we cannot advertise the town is again under staff on law enforcement. The 2002 cutbacks led to the brisk movement of out-of-town drug dealers into a city where previously violent crime was the exception, not a daily pattern.
Grim statistics and fears mounted during the Huntington Fire Department presentation. Cutbacks could cause the city to lose its insurance rating based on response time and staffing. Layoff firefighters, say, hello to increase fire insurance premiums.
Councilwoman Frances Jackson , who lives in the high rise opposite Applebee’s, recalled a nine death fire tragedy in her neighborhood --- Emmons Junior. She speculated, how would the death toll have been affected if HFD was not at its current staffing levels?
“Is there grant money out there you could tap in to,” asked council woman Sandra Clements? Fire Chief C. Craig Moore responded, “ Unfortunately, grant monies for staffing, equipment and facilities is much more difficult to come by. People that are successful at doing that have professional grant writers on their staff. I have myself and an administrative assistant. We’re taxed. There may be some money, but I do not at this time have the resources to find it.”
Council Finance Committee Chairman Steve Williams stated, “None of us like where we are heading. But as we deliberate and communicate to the public, these revenues are all that we have absent any other proposals.” Williams lamented that the administration had not yet made any detailed revenue suggestion analogizing, “We are driving down the road, but the bridge has not been constructed. We will have to make a decision to construct a bridge.”
Williams continued that in the two weeks prior to sending the budget to Charleston, “we would be able to make a determination to either raise a user fee, enacting an occupation tax, a sales tax, or whatever. We have some critical path management to do … of several things happening simultaneously to get to an end point. I suggest we continue working with this budget as thought the revenues are what they are and demonstrate how dire the circumstances are and what we would have to give up if we don’t make some other decisions. At your direction, we’ll have the finance committee receive proposals from the administration as to alternative revenue sources, then we would begin having public hearings and begin deliberations to come back to council and make a judgment.”
Mayor Kim Wolfe indicated that the home rule occupation tax could be placed on the table and Ashland, Ky. has a favorable experience with its tax.
“To make our city safer and cleaner, it will take additional funds. I am convinced the public will come back and say that it was a difficult but right decision.”
The Mayor referred to advice from an Ashland councilman who stated that Huntington’s leaders will hear numerous negatives regarding an occupation tax. “You’ll hear that business will move out, people won’t come [to the city], but we have seen business grow, we’ve seen more activities in our city. Why?
{We] provided for our public the services that they wanted. It was a fair and equitable tax upon the people. You make a little more, you pay a little more. It’s not an easy decision, but to keep our citizen’s safe (police and fire) in an environment that all of us are looking for, it’s a decision that would be the right decision. A year or two later, we would see the positive correction of what’s going on,” Wolfe stated. “I would encourage that we look at [estimates on what an occupation tax would bring in], understanding that we would do away with the user fee and make adjustments in other areas that would reduce costs to those less able to pay those fees.”
Director of Finance and Administration, Brandi Jacobs-Jones, stated , “if you implemented a one percent occupation tax, you would bring in less than $10 million dollars. And, you would reduce the city service fees and municipal fees to the base rate, you would generate an additional $4.3 million dollars. That $3 to $4 million dollar in excess of what we are generating in revenue.”
Ms. Jacobs-Jones explained that the “revenue neutral” promise came from the previous administration. “In checking with the state municipal league and the Home Rule Board, it does not have to be revenue neutral. We would have to repeal the user fee.”
Runyon cautioned, “That is an estimate… and it’s a full year estimate. Anything that this council would do could not be put in place prior to July 1. The way we collect our revenue, it runs a quarter behind. So, the contemplation would be 75%.”
Houck surmised, “We’re going to have to work with the budget and income we have now. There is not going to be a direct infusion of finances between now and July 1?”
“I would say that is correct,” Runyon responded.
However, the pilot home rule granted authority for Huntington brought a significant possible disruption before the governmental body --- nearly every action proposed has been met with either a legal challenge or a threatened legal challenge. In fact, the West Virginia legislature on Saturday, March 13, passed components of fire debris removal laws that required a state fix, not one from one of the pilot municipalities.
Recalling last year’s user fee increase to balance the budget, councilman Nate Randolph called it “a bad idea that we should not do again this year. We need to consider a current revenue stream to remain static,” alluding to occupation tax possibilities. However, the process for potentially implementing such a city tax requires hearings and is not expected to be a popular alternative.
At the meeting, in addition to a user fee increase, a one cent increase municipal fee (fire) was mentioned as a means to eradicate the short fall in that department. The user fee would benefit the police and streets.
In a means similar to the restoration of the police funds, councilman Scott Caserta was successful in passing a motion that would restore fire department cuts. The measure passed 7-2 (Steve Williams, Sandra Clements voted no; Teresa Loudermilk and Jim Ritter were absent.)
Randolph postulated possibility sending the unacceptable austere and furlough laden budget to Charleston as a “worst case scenario,” then, once passed, revisiting the spending plan. Council would have until July 1, 2010 to pass revenue measures to make restorations.
“Even though we file this [budget] in Charleston in a few weeks, this is for the fiscal year starting in July, so we can revisit and refile that budget at a later date.”
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