Between the lines: Season of taxation

Quorum courts, cities weigh annual revenue needs

Taxpayers should brace themselves. It is the time of reckoning for local governments.

It happens about this time every year as the various cities and counties write their respective budgets for the following year. Each must balance planned spending against expected revenue, and decide whether to spend any reserves if the former exceeds the latter.

The process is never easy and is always something of an educated guess at how much money a local government will have or need.

The timing is related not only to the budget-making season but also to the need to adopt any changes in the local millage in time for local quorum courts to levy the taxes before the end of the year.

Talk of tax hikes naturally come up at this time, although most elected mayors and city council members, county judges and justices of the peace would really prefer not to go there.

Sometimes they must.

The Fayetteville City Council made the leap last week from talking about a tax increase to voting for one. Other cities and counties may or may not decide to tax more, but Fayetteville has.

With only one dissenting vote, the council approved a 1-mill hike in the city's property tax. Mayor Lioneld Jordan's administration recommended the increase from an existing 3.1 mills to 4.1 mills, which will bring in about $1.37 million in revenue each year.

That is not all the money the city gets, of course, but this is a significant bump up in the millage rate. It is intended to pay for 23 new or unfilled positions, 19 of which are in the city's police and fire departments.

Those who don't follow council meetings might recoil at the idea of such an expansion. But the mayor and his administrators made a strong case for hiring these people.

This is 2015 and, according to the city's fire and police chiefs, the number of employees in their departments is about the same as in 2006.

The city has added, get this, just one employee since 2009 to be paid from the city's General Fund, which will get the revenue from the millage hike.

Meanwhile, the city's population jumped something like 15 percent, as calls for police and fire service also spiked.

Those calls, especially the really serious ones that require the quickest response, just aren't getting answered as fast as they should be.

The city has been getting by with fewer personnel than needed, even leaving positions unfilled to save money. That's pretty tight control of a budget.

As Mayor Jordan said, "There's few politicians that run on, 'I'm going to raise your taxes,' but there comes a time when there's a need."

A near-unanimous City Council agreed and Fayetteville taxpayers will see this millage hike on future tax bills.

It isn't that much money when spread among all property owners. One mill adds roughly $30 in tax each year for the owner of a $150,000 home.

The tax is really easy to accept if you imagine it's your home that's on fire or you who needs police assistance when those under-manned departments can't quite get to you in time.

Notably, both the Benton and Washington County Quorum Courts are exploring increases in the property taxes they levy.

In Benton County, they're talking about asking voters to approve either a property tax or a sales tax for a new courthouse project. Again, the driver is population growth and the need for more facilities. That's a multi-million-dollar challenge and won't be resolved quickly.

Washington County Quorum Court, which has been haggling over budget matters for months, considered but tabled a millage increase last week. The vote failed 8-6 with one court member absent.

Washington County is just trying to keep the county going and rebuild the reserves the Quorum Court has been dipping into in recent years to pay for basic needs.

Determining what those basic needs are is a point of contention among court members, who also discussed the possibility of asking voters to pay voluntary taxes for some services.

Benton County uses that device to support ambulance service, a historical society and roads. Only those taxpayers who want to pay, do so.

If Washington County's Quorum Court can't get together on a tax hike for all county taxpayers, they might go the "voluntary" tax route.

Meanwhile, these aren't the only folks looking at the idea of a tax hike.

The Fayetteville public library has experienced budget shortfalls in recent years and can't stretch its money to cover all operational needs.

Remember that growing population that's forcing the governments to consider new taxes? There is a related demand on this world-class library, which not only needs more money to operate but also to expand the facilities to answer the need.

The library had planned to expand to the south on former City Hospital property, but an ownership issue has stalled those plans.

Library officials really don't want to have to go to voters with two separate millage hike requests. So they're hung up on when to go to voters.

The library's day of reckoning is coming, although later is probably better since the city has already hiked its taxes and the county could do so, too.

Commentary on 10/11/2015

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