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Samburg ponders levying property tax

Samburg ponders levying property tax

By: John Brannon Messenger Staff Reporter

By JOHN BRANNON
Messenger Staff Reporter
Samburg Mayor Larry Gene Davis said Monday that public hearings will be held in the near future to receive input about the city’s proposal to levy a property tax.
The time, date and place will be advertised in local media outlets. “City Hall is too small. So we’ll probably meet at the (Samburg Volunteer) fire department,” Davis said.
Davis commented late Monday afternoon after he and the Samburg board of aldermen met at City Hall with David Angerer, a consultant with Municipal Technical Advisory Service (MTAS) of Jackson.
Angerer was invited by Davis to meet with the city aldermen for his advice about levying a property tax. The meeting lasted well over an hour. No formal action was taken. Only one concerned citizen attended to watch and witness the proceedings.
“We’re in bad financial shape,” Davis told The Messenger. “In order to improve and grow and get grant money, we have to have money. We have no property tax. We never have had one.”
Samburg relied heavily on proceeds from sales tax, state-shared revenue such as fuel fees and a hotel/motel tax to pay its way.
But revenues have dropped. Thus, discussion of levying a property tax.
“We’ll get the community’s input, see what they say,” Davis said. “Most of the community doesn’t know anything about our financial shape. Some do, some don’t. Eighty percent don’t.”
Budget challenges
Angerer said every incorporated town or city has a budget problem, that it’s part of being a city government.
Samburg city leaders, he said, give him the impression they have squeezed the budget, tried to stretch it and their costs are going up.
“Revenues have plummeted. They used to make a lot of (sales tax) money from (Sunday) beer sales. Now nobody comes here for that any more. (Beer drinkers) are either buying it in other towns or they’ve sworn off it,” he said.
The shortfall, Angerer added, will hit Samburg hard. “They’re looking for money to make up the difference. If they can’t do that, they’re looking to see what they can cut. The problem is, in a town this size, there isn’t a lot to cut to begin with. It’s like trying to put a 98-pound weakling on a diet.”
Angerer, 54, has been an MTAS consultant seven years. Prior to that, he was city manager of Maryville, Mo., 16 years. He said he’s also worked for Missouri and Nebraska state governments.
Steak or hot dog?
Angerer advised the Samburg city council that you cannot order a steak or lobster and expect to pay a hot dog price for it. “That’s what I’d be telling the folks in your town,” he told them. “Nobody wants to pay more taxes. But if they’re not willing to pay for the cost of government, then it’s incumbent on you folks to ask the community, ‘What can we cut?’
“Most of them will tell you, ‘We can’t think of anything. That’s your job.’ So you’re going to have to think about it. If you need $20,000 to balance your budget, you’re going to (find) $20,000 to cut out of your budget.
In addressing possible cuts, city officials mentioned the city’s police department, comprised of only one officer, Gerald Cox. Angerer said the city could cut that position and have no police force at all. It would then rely on the sheriff’s department for police services.
But Angerer warned them to think long and hard. “There’s a big difference in having just one policeman and not having one at all,” he said.
He told the board he’s “pretty good with budgets,” but doesn’t think he could find $20,000 worth of waste, fraud or abuse out of their city budget.
“You don’t have that big a budget to squeeze. You take me to Union City and I might be able to find something there. It’s a pretty well-run city, so maybe I couldn’t. But there’s usually something (to cut),” he said.
A $1 tax?
Angerer said that if the board levied a $1 property tax — $1 per $100 valuation — it would still be among the lowest-taxed municipalities in Tennessee. At that rate, he said, the owner of a $100,000 property would pay about $250 a year, and the owner of a $50,000 property would pay about $125 a year.
Budget crunch
A property tax would be a first for Samburg. With a population of about 265, it has private business enterprises and residential dwellings and a volunteer fire department. But it has no property tax.
Its budget is about $80,000 a year, according to Davis.
And lately, it’s experiencing a budget crunch.
Tim Bunch told his peers on the board that he remembers the good days when he owned Tim’s One Stop and sold between 500 and 550 cases of beer each Sunday. (Samburg permitted Sunday beer sales when other towns in the county did not.) And Samburg made a lot of sales tax money off those beer sales.
“We used to get three big checks from beer companies.”
But now, he said, it’s all gone south for some reason. “They’re down to 75 cases every Sunday.”
What the board is trying to do, Bunch said, is figure out a way to get more revenue for the city coffers. That’s why a property tax is being considered.
“We’ve never had a property tax here. They all live free here in Samburg, always have lived here free,” he said.
And right now, income to support the town is down, “about $20,000.”
“We didn’t even have enough last month to pay our insurance,” he said. “We have about $40,000 in savings, but we can’t use but 15 percent of that. It’s from the hotel/motel tax.”
How much property tax would Samburg need? “I figure about a dollar (per $100 valuation),” Bunch said. “It would be less than a dollar a day (for a property owner). You can’t go wrong there.”
Helping hand
Angerer distributed a thick booklet, “Sources of General Fund Revenue,” to board members. It contains 10 key questions the public is likely to ask, such as “Why is more money needed?” and “When is it needed? and “Is the tax fair to everyone?”
Meanwhile, he said, MTAS is available.
“There’s a lot of things for you to think about,” he told the board. “We’ll help you, once you make up your minds. We can do everything for you except make up your minds.”
He advised them to get it done concurrent with writing a new city budget for the upcoming fiscal year which begins July 1.
Published in The Messenger 3.11.08

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