Small tax cut, big pay hikes talked
Wednesday, August 20, 2014 1:00 AM
Philadelphia taxpayers could see a slight tax cut and 20-percent raises for department heads and 2-percent cost-of-living raises for other city employees under a proposed 2015 budget.
This after the Philadelphia Mayor and Board of Aldermen doubled ad valorem taxes last year in a desperate move to keep the city in the black after nearly a decade of spending more than they were taking in.
While aldermen pledged last year to cut taxes if revenues improved, they said needs and more equalized pay with other cities now outweigh any promises made.
The mayor said he's flat opposed to cutting taxes right now, saying it's too soon to know if the city might need additional revenue.
Most all agreed the raises are necessary.
To generate additional revenue for the proposed $7.9 million general fund budget, the Mayor and Board of Aldermen plan to shift about $650,000 from reserves to pay off a loan on the park and infrastructure for Lowe's.
The projected $483,000 in sales tax revenue currently being diverted to a Tax Increment Financing fund to pay the loan on the park and Lowe's will instead go to the general fund.
Not included in the $7.9 million budget is an additional $58,000 in revenue anticipated from DUI and JAG grants, which have been awarded annually for the police department in recent years.
Ward 1 Alderman Josh Gamblin said the $650,000 would be set aside to pay off the TIF loan over the next six years and to satisfy the city's requirement with the state.
City officials had hoped to pay off the TIF loan this year but that would require the county to fulfill its share of the cost which is just over $300,000.
The TIF loan was secured for park improvements and for infrastructure to bring the Lowe's development.
The TIF district includes Lowe's and other nearby developments.
The Mayor and Board of Aldermen discussed the proposed budget during a work session last week, with most of the debate centered on salary increases and lowering the millage rate which was doubled from 10 to 20 for FY 2014.
The proposed budget funds most of the "wish lists" from the department heads. It also includes about $500,000 for paving, $200,000 of which is targeted for repaving a portion of Pecan Avenue in the spring.
Gamblin voiced support for 20-percent "salary adjustments" for the department heads, telling the board that he had looked at city officials' salaries in cities similar in size and population with Philadelphia.
The police chief would be excluded from the pay hike as he was hired in December, Gamblin said.
"Looking at department heads across the state, we are pretty low on salaries," he said, noting that he studied salaries provided by the Mississippi Municipal League dating back to 2009.
"It looked to me that it warranted an adjustment," he said. "The whole pay system is screwed up. It has no rhyme or reason. I heard that one board gave a man a raise just because he got married."
Ward 2 Alderman Jim Fulton and Alderman-at-Large Willie Jackson voiced support for a salary increase, but favored a lower percentage for the department heads.
"I would rather crawl than make big leaps," Fulton said, recommending a 5 percent or more increase as opposed to the 20 percent.
Jackson said the department heads deserved an increase.
"I would feel more comfortable with the 10 percent," he said. "I think us being in agreement is important, too."
Ward 3 Alderman James Tatum, Ward 4 Aldermen Cecil Nichols and Mayor Young all voiced support for the 20 percent raise.
Nichols said the new budget included enough new revenue to fund the raises.
"The budget is good and the city is in good shape," he said. "We can't anticipate the future but the employees have stuck by us. This is the right thing to do right now."
The 20-percent salary increase would bring the fire chief's and city clerk's salaries from $42,057 to $50,468; the street foreman's from $38,209 to $45,850; the cemetery and animal control foreman's from $36,483 to $43,779; the court clerk's from $29,910 to $35,892; the building official's from $34,091 to $40,909; and the landfill foreman's from $35,172 to $42,206.
The police chief's salary would remain at $55,000.
The mayor and each aldermen voiced support for the 2 percent cost-of-living increase for other city employees.
While each of the aldermen favored a 2 mill decrease for FY 2015, Mayor Young urged them to reconsider.
"We just finished eight years of deficit spending," he said. "This is the first year with some revenue left over. I'm just not interested in decreasing millage at this time."
Aldermen have projected a $172,750 surplus in the general fund when FY 2014 ends on Sept. 30.
Jackson said he was in support of the millage decrease.
"I'm in favor of reducing it and giving property owners a raise, too," he said. "It's very modest."
"This is a balanced budget," he said. "If we have a surplus we need to give it back. It is a fluctuating thing."
Fulton reminded aldermen that they agreed last year to look at dropping the millage if the city saw a surplus.
"I don't want to be accused of jumping out of the truck this year," he said. "I'm for the decrease."
The millage drop would bring a savings of about $20 in ad valorem taxes on a $100,000 house in the city with homestead exemption. The 1.6 mill drop in city school taxes for debt service would bring about a $16 savings in taxes on the same house.
The proposed budget also grants an additional $25,000 for the Police Department for new computer software; $2,000 each for Main Street, the Arts Council and the historical museum; $7,340 for parks and recreation; $1,000 for the Soil and Water Conservation Service; $1,000 for the Boys and Girls Club; $4,535 for the public library; $10,000 for city beautification; $2,000 for an annual salary increase for the city attorney; and $10,000 for increased costs at the jail to house city prisoners.
The budget also includes $50,000 for business and industry recruitment and $47,500 for a new dog kennel for animal control.
The Mayor and Board of Aldermen was to hear public comment on the proposed budget at its meeting last night.