Tax hike may go on Crestwood ballot
December 14, 2005 - An ordinance to place a 20-cent tax-rate increase on the April 4 ballot was scheduled to be considered earlier this week by the Crestwood Board of Aldermen.
The Board of Aldermen was scheduled to meet Tuesday night — after the Call went to press.
If placed on the ballot and approved by voters, the city's residential tax rate would increase to 44.1 cents per $100 of assessed valuation, while the city's personal property tax rate would increase to 45 cents per $100 of assessed valuation. The city's commercial tax rate would increase to 46.3 cents per $100.
Mayor Roy Robinson told the Call Monday that he asked City Attorney Rob Golterman to draft the ordinance so that the Board of Aldermen could begin discussing the issue. The deadline to place propositions on the April ballot is Jan. 24, he said, noting that after this week's meeting, only one regularly scheduled board meeting remains.
"Nobody else seemed to be moving forward on it, so I figured I'd start and see what the rest of the board says. It's just an initiative on my part ...,'' Robinson said.
The board voted 5-1 Nov. 1 to adopt an ordinance borrowing up to $3.5 million from Southwest Bank. Board President Tim True-blood of Ward 2 was opposed.
The $3.5 million the city is borrowing includes a $1.5 million line of credit and a $2 million promissory note. As collateral for the $3.5 million from Southwest Bank, the titles to City Hall and the city garage on Pardee Lane are being pledged.
"We have a $2 million debt and a $1.5 million line of credit that we have to start making payments on. We've got to get the money that can pay this off,'' Robinson said, noting that in 1985 the city's property tax rate was 44 cents per $100 of assessed valuation.
That tax rate later was reduced "because we had revenue that would allow us to do that from our business community and our mall (Westfield Shoppingtown Crestwood) was doing great. Now the mall is not doing great ... and we do have a debt that has to be paid off,'' he said.
Given the city's indebtedness, 20 cents is a fair amount, Robin-son said, adding that aldermen would decide the actual amount of any tax-rate increase placed before voters.
Aldermen last month discussed placing a bond issue on the April 4 ballot, but took no action. Proposition 1, which would have authorized the city to issue up to $6 million in general obligation bonds, was overwhelmingly defeated by voters last April.
Asked if the proposed tax-rate increase would be an alternative to or in addition to a bond issue, the mayor said, "Oh, there's no bond issue. We'd never be able to get a bond issue passed. I think the board realizes that, too ...''
He added, "People just do not like the bonds.''
Crestwood voters Nov. 8 approved increases in the city's merchant license fee and the city's tax on utility gross receipts for commercial customers, but rejected an increase in the tax on utility gross receipts for residential customers. Approval of the two measures will generate nearly $239,000 annually for the city's general fund.
Given voters' rejection of increasing the tax on utility gross receipts for residential customers — for cable television and electricity — some aldermen were extremely skeptical of obtaining voter approval of some type of revenue-generating measure.
But Robinson is optimistic that with the proper education, voters would approve a well-defined and specific ballot measure to help alleviate the city's financial woes.
"There's enough people in the community who realize that the time has come when we need the help from our residents,'' he said. "They can no longer rely on the business community to carry the load. They just can't do that any more because times have changed. But we still have to have operating funds and we have to pay off this debt that was accumulated before I came in.''
If approved by voters, a 20-cent tax-rate increase would generate roughly $540,000 annually for the city's general fund, according to Director of Finance Diana Madrid. A resident with a $150,000 home would pay an additional $57 in taxes to the city if a 20-cent tax-increase was approved, she said.
Since 2003, the Board of Aldermen has reduced personnel costs by more than $955,000 annually. The proposed 2006 budget in-cludes 107.25 employees, down from 130.5 in 2003. Approval of the budget was to be considered Tuesday night by the board.
"I think the people have to understand that this is the only way we're going to get out of this hole and we can't do any more cutting ...,'' Robinson said. "We're down to bare bones as far being able to provide the services like snowplowing and everything.''