Aberdeen City Council Approves Budget

The Aberdeen City Council adopted Mayor Michael E. Bennett’s $12.6 million spending plan Monday that included a property tax reduction and pay raises for employees.

“I’m ecstatic with the budget,” Bennett said. “It only increased a little over 2 percent. In that 2.36 percent increase, we were able to give a small cost of living increase.”

Councilwoman Ruth Elliott, who has said the city should be more frugal for taxpayer’s sake, cast the lone dissenting vote. Elliott opposed the budget, in part, because it did not reduce the property tax rate enough to keep spending at a flat level — known as the constant yield tax rate.

Elliott recommended the budget be cut by at least $73,000 — which would decrease the property tax rate by .6 cents.

The budget adopted Monday night does reduce the city property tax rate by almost a penny, from nearly 69 cents per $100 of assessed value to 68 cents per $100 of assessed value—a one percent decrease.

That means, a taxpayer with a home assessed at $100,000 who paid $687.50 in municipal property taxes during the current fiscal year would see that bill reduced to $680 for FY 2012.

Under the budget as passed Monday, the new, lower tax rate would generate about $9.3 million in revenue — about $100,000 more than the current budget year.

Other council members commended Bennett for lowering taxes.

Bennett said Monday that he does not set the budget based on the constant yield rate.

"If we go to the constant yield, nothing new and exciting is happening," Bennett said.

The constant yield concept is designed to “dismantle” government, Bennett said.

The mayor likened it to a property management business that made $2 million in one year by charging $700 per month rent being forced to drop rents to $650 per month after adding additional units to the rental portfolio to keep from making more money. If such a business brought more units online it would have to drop rents in order to only raise the same $2 million from the previous year.

“That’s a game,” Bennett said.

Local businessman Patrick McGrady said the city should try to maintain the constant yield tax rate because he believes that would ultimately lure more new residents into the city.

"If we can do that it will help us going forward," McGrady said.

There are 180 vacant homes in town currently. That's about double the usual number, he said.

"I really hope we could make more cuts so that Aberdeen will have a budget that everybody can afford," McGrady said.

FY 2011-2012

FY 2010-2011

Percent Change

Total Budget

$12,691,562

$12,399,273

2.36 %

Tax Levy

$ 9,330,196

$ 9,226,904

1.12 %

Tax Rate per $100 of Assessed Value

$0.68

$0.6875

-1%

Taxes paid on house assessed at $100,000

$680

$687.50

-1%

Surplus Funds Applied to Budget

0

Not Yet Available

Not Yet Available

Surplus Funds Remaining

0

Not Yet Available

Not Yet Available

Elliott recently accused Bennett of padding the budget and being intentionally evasive. She also proposed a dozen additional cuts. The council did not make any of them.

City Manager Doug Miller said budget cuts can’t be made without care.

“Those numbers mean something,” Miller has said. “The mayor and I and department heads have scoured the budget to see how we can keep cutting it.”

Instead, Miller put forth two amendments.

The first amendment created a reduced property tax rate for energy efficient buildings related to expected base realignment development. Those buildings, which would require special certification, would pay 17 cents per $100 of assessed value or about 25 percent of the full rate.

Elliott also cast the lone dissenting vote on this amendment because she has said she doesn’t believe that is the way to spur development.

The second amendment was that the list of capital projects be substituted. The amounts did not change, but the list was more comprehensive. The second amendment passed 5-0.

Miller has said the city tries not to create a culture that punishes employees for fiscal responsibility and the administration doesn't only consider fiscal responsibility during the budget drafting process. Reducing the tax burden is a constant concern, Miller has said.

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Correction: This article has been changed to accurately reflect by how much City Councilwoman Ruth Elliot's suggested budget cuts would reduce the property tax rate. The amount is 0.6 cents, not 6 cents. Patch regrets the error and thanks Sen. Art Helton for catching the missing decimal point.