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City Council OKs effective tax rate, 7.5% pay hike for city employees

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The Huntsville City Council agreed in a split vote Tuesday night to maintain the “effective tax rate” for city taxpayers — that is, the rate that would generate the same amount of property tax revenue this year over last year while not raising the tax bill of the average city property owner.

That may have given taxpayers who protested a proposed tax increase reason to celebrate, but those who spoke at two public hearings before the budget vote Tuesday couldn’t declare a clean victory. In another split vote, council also agreed to give city employees the 7.5 percent pay hike City Manager Matt Benoit pressed for despite vigorous public protests.

Council originally considered maintaining the current fiscal year’s tax rate of 41.06 cents per $100 property valuation, which would have generated an estimated additional $400,000 in revenue while increasing the property tax bill for homeowners whose property had been assessed at a higher value this year.

Following two public hearings, a media campaign of misinformation by one council member who favored the higher rate, and opposing council members’ arguments against it, the council adopted the effective rate of 38.36 cents per $100 valuation in a 7-2 vote.

Ward 3 council member Ronnie Allen argued that the tax rate should actually be lowered below the effective rate of 38.38 cents per $100 valuation because council had previously retired some of its outstanding debt early. He wanted the money that was saved to be returned to the taxpayers instead of collected by the city as unallocated budget reserves.

Council did not vote on Allen’s proposal. But, when it came time to vote for the new fiscal year budget — containing both a tax rate higher than Allen proposed and the 7.5% pay increase for city employees — Allen and at-large council member Andy Brauninger voted against it. They also voted against a separate motion to approve the new tax rate.

After much discussion and public protest and a previous hung vote, the Council also voted 5-4 to grant city employees the full across-the-board 7.5% pay raise that Benoit had requested.

Mayor Mac Woodward, Ward 2 council member Tish Humphrey and at-large council members Don Johnson, Lydia Montgomery and Keith Olson voted in favor of the pay increase. Allen, Brauninger, Ward 1 council member Joe Emmett and Ward 4 council member Joe Rodriquez voted against it.

The 2015-16 fiscal year budget goes into effect October 1.

In a separate action council voted to allow city staff to solicit bids for the controversial $250,000 way-finding signage project. Council would determine final approval of a budgeted amount for the project based of the final cost estimates and how much of the cost, if any, could be paid for out of Hotel Occupancy Tax funds.

Also in a separate action, council authorized issuing certificates of obligation as new debt to pay for the new Solid Waste Transfer Station. The final cost of this project has yet to be determined.

One comment

  1. We should all work for the government. No one in the private sector can hand out 7.5% across the board raises. But when your method of generating revenue involves legalized theft from taxpayers, then who cares.

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