Murfreesboro Post
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How did Murfreesboro arrive at new tax rate?




Dr. Bill Ford, former president of the Federal Reserve Bank of Atlanta and MTSU professor, asks to speak to the Murfreesboro City County prior to last Wednesday meeting to share his concerns about the proposed tax increase. Council members pictured, from left, are Bill Shacklett, Ronnie Martin, Vice Mayor Madelyn Scales Harris, Mayor Shane McFarland, Rick LaLance and Eddie Smotherman.JASON M. REYNOLDS

Dr. Bill Ford, former president of the Federal Reserve Bank of Atlanta and MTSU professor, asks to speak to the Murfreesboro City County prior to last Wednesday meeting to share his concerns about the proposed tax increase. Council members pictured, from left, are Bill Shacklett, Ronnie Martin, Vice Mayor Madelyn Scales Harris, Mayor Shane McFarland, Rick LaLance and Eddie Smotherman.JASON M. REYNOLDS

One day prior to last Thursday night’s second and final reading on the new property tax rate, the Murfreesboro City Council held the first reading during a meeting that lasted about three-and-a-half hours.

Some members of the public on Wednesday expressed frustration the council did not hold a public hearing to allow them to speak out. The council basically had held two hearings the previous week, on Thursday, June 6 (a monthly open forum where any resident can address the council on any topic — in which some residents addressed the tax hike) and during the council’s regularly scheduled meeting that evening.

But during last Wednesday’s meeting which started at 11:30 a.m., residents nearly filled the council chambers to listen to the debate, and some of them said they had hoped to address the council.

Murfreesboro resident Tammy Allen was one member of the near-capacity audience Wednesday. She held a sign saying, “Home Owners + Fixed Income (does not equal) 39% tax” and “When we lose our houses where do we go? Why can’t we be heard?”

Prior to the Wednesday meeting, Dr. Bill Ford asked Mayor Shane McFarland if he would be allowed to speak. The mayor said he would have to talk to him outside of the meeting. Ford is a former president of the Federal Reserve Bank of Atlanta and a retired holder of the Weatherford Chair of Excellence in Finance in the Jennings A. Jones College of Business at Middle Tennessee State University. During the June 6 hearing he said that with the proposed county tax increase, city residents faced a 55 percent to 60 percent property tax increase.

Wednesday’s approval on first reading of 34 cents came after hours of debate and a number of stalemates on how to proceed in approving a budget and tax rate. The original tax increase considered was 37 cents. Members of the council offered different numbers for approval, ranging from the original 37 cents to as low as 31 cents and 25 cents.

The 34-cent increase Wednesday was approved by a 5-1 vote. Voting for the 34-cent rate were McFarland, Bill Shacklett, Eddie Smotherman, Kirt Wade and Ronnie Martin. Vice Mayor Madelyn Scales Harris voted no. Rick LaLance left the meeting prior to the final vote.

Scales Harris on Wednesday told the city staff they did a “fabulous job” on the budget and her vote was not a reflection on them. She said she disagreed with statements made by council members about voting simply on what the city manager presents to them.

“That’s why we have a council,” she said.

The trash fee originally was budgeted with a $5 increase; that was lowered to a $2.50 increase.

In addition to changing the planned tax rate and trash fee, the council authorized making cuts to several line-item expenditures in a supplemental budget.

Prior to all the amendments, the council was considering a FY 2020 budget of $647 million, according to budget documents. That includes $188.8 million budgeted in General Fund and the rest in other funds, including Murfreesboro City Schools ($87 million), Water Resources Department ($55.4 million), and Electric Department ($175.4 million). The $188.8 million includes an unassigned fund balance of $51.4 million, and budgeted supplemental expenditures for FY 20 of $3.9 million.

The originally proposed 37-cent property tax rate of 1.3194 cents was 31 percent lower than the rate was in 1999, according to the budget. City Schools operating expenses and debt service equates to 23.3 percent of projected property tax revenues.

Council member Bill Shacklett asked City Manager Craig Tindall to talk about the process that officials took to arrive at the proposed budget. Tindall told of how they started the budgeting process after the first of the year and asked departments to review their budgets. He said that last year, departments were asked to cut 10 percent out of operating budgets. Those cuts meant that it was difficult to maintain services and created additional costs. The council last year asked staff to create budgets that would stop dipping into the city’s general fund balance, or savings account.

This year, administration told departments to only request what was “necessary,” Tindall said. They cut those amounts by $1.4 million, he said. Staff held four to five meetings with the council to review the budget. There have been “substantial increases” in wages, as well as rising construction costs, throughout Middle Tennessee.

Many budget revenues and expenses are “pass-through” items, such as revenues from state and federal grants the city receives for projects that must be recorded in its budget, such as for road work and greenway construction, officials said. Sometimes those items require a small matching amount from the city, but at an amount much less than what the city would pay without the grants.

McFarland said, “It’s easy to armchair quarterback.”

McFarland said he spoke to the Tennessee Department of Transportation, which told him that paving costs have increased 44 percent over the past four years. He said that he would like to phase in garbage fee increases with a plan, like what the city did with water rates in the past.

Madelyn Scales Harris expressed concern for “people less fortunate than I am who are going to have to pay this amount.” She mentioned that the city makes available a tax free for people age 65 and older based on their income.

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