With sales taxes forecasted to increase thanks to a healthy influx of new businesses, the Early City Council approved a 1-cent drop in its property tax rates.
For the second year in a row the city council approved a drop in the city property tax rate by a 4-1 vote with the lone dissenting vote, cast by Councilman Leland Acker, coming because the proposed 2018 tax rate was not low enough.
“Most of that is due to the growth in our economy,” Early City Administrator Tony Aaron said. “Another thing you’ll factor into this is we, the city, adopted 1.5 of a percent for property tax reduction so a half of a percent of our sales tax is calculated into this rate to help keep this property tax low. Your predecessors were already leaving that rate reduction. When our sales taxes go up, it automatically pushes our property tax down.”
Aaron presented the sales tax to the board before it conducted a workshop in preparation to adopt its 2018 budget. The budget Aaron introduced factored a 1.5-cent reduction in the property tax rate, but councilmen suggested keeping the reduction to 1 cent in order to create a “rainy day fund” for emergency expenses or projects.
“If we were to cut the tax rate by half a cent we would still grow our revenue by $63,000,” Aaron said. “That would be $63,000 in tax revenue that would be coming into our budget. If you went down and cut it all the way to 1.5 percent, we would still be generating about $45,000 more than we did last year.”
A timely example came minutes before the tax rate discussion, when the council unanimously approved funding remaining $13,600 needed for a proposed sound garden at McDonald Park. Early High School Team Leadership Members Zane Hobson and Breanna Brown proposed the $25,000 project, having already independently raise $12,400, prompting Councilman Charles Matlock suggested keeping the rate at 1-cent to use the leftover funds for community projects or if an unforeseen expense arises.
“Every time we meet, somebody is asking for money,” Matlock said. “Boy, if we could continue doing like we are. I think we have an opportunity to put some back for those leaner years that we don’t expect. We’ve had some good times. Early has really shown here economically the last couple of years. It would make me feel more secure to put some of that back.”
Acker suggested keeping Aaron’s 1.5 percent reduction in order to counterbalance expenses related to rural living and rising cost of living increases.
“There is a certain amount of financial wisdom to having a rainy day fund as it were,” Acker said. “At the same time, to the taxpayer, in bad times it’s unfortunate the price of diesel skyrockets, property values drop. We ‘re sorry when have to raise taxes. When the good times come back around they never get that release.
“… We’re not setting tax rates in a vacuum. Mr. Matlock mentioned the fact we’re the lowest municipality in terms of property tax rate, but the school’s property tax rate offsets that. It does effect what our taxpayers pay and it effects business development.”
Mayor Pro Tem Benny Allcorn suggested a compromise of dropping the tax rate by 1-cent, replicating the council’s actions in 2017.
“I would like to see us considering lowering it a penny again, like we did last year,” Allcorn said. “It doesn’t sound like much, but it is and it is in the middle of what we’re trying to do. We’re still able to say we lowered our tax rate for the last two years … Our plans for last year worked well. It doesn’t increase the revenue a lot, but it’s enough for that one project we need that extra money for.”