After months of discussion in committee, the proposed 2009 budget went before Smyrna Town Council for the first time at the December 1 council meeting.
The total expenditures in the 2009 budget were trimmed down to $23.5 million, about $500,000 below last year’s $24 million budget.
But the budget wasn’t the only topic of discussion. The town’s property tax rate was also on the meeting’s agenda.
Council considered a proposal to raise property taxes and lower electric rates in a “revenue neutral” adjustment.
Several residents voiced their concerns about the budget and a potential tax hike at a public hearing prior to the regular meeting.
Members of council also debated the budget and tax rate, but in the end, they didn’t approve either one at the meeting.
Council voted to table both the proposed budget and the property tax rate until the next council meeting on December 15.
According to Smyrna’s town charter, council must approve the 2009 budget at this meeting, the final council meeting of the calendar year.
Five-cent property tax hike,
offsetting electric reduction proposed
At the November 25 finance committee meeting, Councilman Gene Mullen presented a resolution to increase the town’s property tax by five cents per $100 of assessed value, and to offset this increase with a corresponding decrease in the town’s electric rate.
According to the resolution, these changes would be “revenue neutral” for the town.
The finance committee approved a motion to send this recommendation to town council.
A five-cent tax increase would raise Smyrna’s property tax from 25.26 cents to 30.26 cents per $100 of assessed value, a 19.8 percent increase.
Town Manager Dave Hugg estimated that the accompanying electric rate decrease would result in the town bringing in about $360,000 less in electric revenue next year.
The financial impact of this change would differ from resident to resident, depending on electric usage and assessed property value.
For example, residents who use relatively little electricity but have high property value assessments would likely end up paying more for the property tax increase than they would gain from the electric savings.
On the other hand, residents who use a greater amount of electricity but whose properties are assessed at lower values might gain more in electric savings than they would lose in property tax increases.
If approved, the proposed property tax increase and utility rate reduction would move the Town of Smyrna closer to balancing out its general fund and utility fund.
The Town of Smyrna’s general fund operates on about a $2 million deficit, which is covered mostly by profits from the electric utility.
According to Hugg, Smyrna’s electric bills are currently $167.68 per 1,000 kilowatt hours of usage, the highest in the state.
Last year, Smyrna Council began the process of balancing the general fund when it raised the property tax by eight cents, from 17.26 cents to the current rate of 25.26 cents per $100 of assessed value. Five cents of this increase – but not the other three cents – was offset by a corresponding electric decrease.
Residents express frustrations at public hearing
During a public hearing immediately prior to Monday’s council meeting, several Smyrna residents commented on the town’s budget and tax proposals.
Barbara Allsopp asked some questions about the budget cuts from the November 25 finance meeting and requested that council consider additional cuts.
“I’m just asking that it be looked at again for more cuts and that the projects be put on hold,” she said.
Allsopp also expressed frustration with the town’s property taxes, saying that those who live outside town limits seem to enjoy the same services.
“Think outside the box, instead of trying to get blood out of a stone from residents,” she said.
Marty Maxey drew applause from the audience when he called on council not to raise taxes.
“There are different ways of looking at things,” he said. “Don’t raise my taxes. I don’t want to see it, and I don’t think anyone in this room wants to see it.”
Maxey said he lives on a pension and everything is budgeted.
He suggested that the town put off the Four Corners project and to cut back on police spending.
“What’s wrong with bicycle patrols?” he asked.
Councilwoman Valerie White said she, too lives on a fixed income. She said she’s not always happy with the outcome of the budget process, but a budget needs to be passed.
White suggested that if citizens would come to more meetings, “maybe it wouldn’t be like this.”
“Come sooner, before you’re all angry at the last minute,” she said.
Ann Henning said she loves Smyrna and its small-town environment, but added that she’s “never lived anywhere where the electric rate is higher than the tax rate.”
Henning said the biggest complaint in town seems to be the electric bills.
“It’s not fair to take electric rates for the general fund,” she said. “I’ve never had this anywhere else.”
Natalie Brown and Al Kraft both expressed concern about their expenses.
“Our taxes and our electric bill keep going up every year, and we can’t afford it,” Brown said.
“These utility bills are constantly going up,” Kraft said.
Council debates budget and tax rate, then tables both
When council reached the proposed budget on the agenda at Monday night’s meeting, Councilman Bill Pressley made a motion to table it until the December 15 meeting.
Pressley said the public would then have another chance to get involved in the budget process at a finance committee meeting scheduled for the next day, December 2, after the Sun-Times deadline.
“We’ve got one more shot left to do this,” he said.
Pressley said the finance committee did a good job on the budget, but added that “there’s some changes that still need to be done on this.”
Councilman Bill Raynor was not pleased with the budget process.
“I think this was a well-planned Ponzi scheme to raise taxes two years in a row,” he said.
Mullen responded by saying that Smyrna has highest electric cost in the state but very low property taxes.
“Something is wrong with that picture,” he said. “What’s wrong with that is it’s not balanced.”
Mullen also emphasized that town services aren’t free, and that budget cuts have consequences.
He said the town could have its police officers driving 25-year-old vehicles, but then they’d spend a lot of money to keep the vehicles running.
“Do you want our officers to ride bikes? Expect a 45-minute response time,” he said. “If you expect it for nothing, you’re not going to get it.”
Pressley said that was a “good speech,” but explained that he was only asking to table the budget.
Mullen continued: “Do you want your services? Do you want the electric to come on? Do you want the water to flow, and the sewage to get out of there? Do you want police protection? It does not come free.”
Councilman Larry Thornton, a member of the finance committee, said he had no problem with tabling the budget until the next meeting, but also said he was “starting to feel a little offended” at the notion that the budget process wasn’t done in an appropriate manner.
“We have worked diligently to keep our services up, to keep costs down and keep the town running,” he said. “I’m not going to sit up here and feel like an idiot as there’s banter and stupid questions up here from my colleagues about Ponzi schemes.”
Mayor Pat Stombaugh pinpointed spending as a cause of some of the town’s financial concerns.
“I think our problem is we went off the deep end for several years,” she said.
After discussion came to a close, council voted 6-1 to table the budget. Mullen cast the dissenting vote.
After that, Pressley made a motion to also table setting the 2009 property tax rate. Council voted 6-1 to table the tax rate, with Mullen voting against it.
