Council Considers Trims And Taxes To Fill Budget Hole

Apr 9, 2015

Charlotte’s City Council is looking at ways to fill a gaping hole in the budget. Last night, city manager Ron Carlee presented options from trims to tax raises.

City leaders have said the upcoming budget hole is worse than any single year of the recession. But instead of a flailing economy, it’s due to state tax changes and Mecklenburg County’s property tax revaluation redo.

"The bottom line where we are is $21.7 million gap, or about 3.7 percent,” Carlee explained to the council. With a government hiring freeze already in place, he began last night’s meeting with some relatively painless ways to add to those savings, such as shifting money from less affected accounts into the city’s general fund and cutting down on travel and office supplies.

“What we’re trying to do at this point is look at all of the alternatives available to us outside of service and program reductions and outside of any property tax change,” said Carlee.

“These are not recommendations,” Clodfelter emphasized. “This is a work in progress.”

But a budget hole this size requires more substantial fill, so other ideas include raising fees to entirely cover services the city took on during the recession and cutting city support for housing, education and arts non-profits.

The city’s preliminary estimates show that, together, these efforts could cut the deficit roughly in half. As for the rest, Carlee has previously floated a 1 percent cut across city government, as well as salary freezes. Staff also presented another option: raising property taxes.

“This is not a recommendation,” Carlee repeated, to laughter. “This is the only tax you control at this point. And it would be professionally irresponsible to not show you what the options are.”

Each tenth of a cent raise equals about $900,000 for the city. Councilman David Howard asked what it would take to refill the lost property tax revenue.

“Because that would put us back at what we thought we were dealing with at the beginning of the year,” Howard said.

The answer is about a one-cent raise or $6.20 for a median homeowner.

“I’m the last one who would want to go there,” said Councilman Ed Driggs, one of two Republicans. “But I just want everyone to understand that if your property tax went up by a percent, the benefit we would get to our general fund would be something like $3.5 million.”

 Driggs didn’t say he’d support that. No one did—after all, it wasn’t a recommendation.

Carlee will bring more options next week. He won’t present a recommended budget, which will have to fill the hole, until early next month