City Council members spar over budget, taxes

Don't expect a City Council hugfest when it votes on a new budget if last night's sometimes testy back-and-forth is any indication of what is to come.

One one side of last night's budget debate were now-veteran council members Justin Shields and Tom Podzimek who made it clear that they are not afraid to raise property taxes and other revenue to invest in the city's future.

“I'm the only tax-and-spender in the crowd,” said Shields at one point in accusing Mayor Ron Corbett of suggesting that any council member who didn't want to hold the line on taxes was a big spender.

Corbett - Shields backed him in the November election - and a second new face on the nine-member council, Don Karr, said they wanted to contain property taxes at a time when they say the economy is down, flood victims are hurting and senior citizens are seeing a zero increase in Social Security checks.

Council member Monica Vernon aligned with Corbett and Karr, and she said she felt insulted by suggestions that she doesn't care about the city's future simply because she favors digging down into the city budget to find unnecessary spending.

At one point, Vernon lit into what she said had become accepted dogma or “the hash slung around here” - that is, that city needs to take on higher levels of debt each year than it historically has taken on to repair neglected city infrastructure.

In tougher years in her house, she said her family tightens its belt, and she said maybe the city can, too, this year. Vernon later said she needed to know more of what's in the city's budget before she would have the “confidence” to make a case to citizens for raising property taxes.

After the meeting, Corbett, a former speaker of the Iowa House of Representatives, said the two-hour meeting featured some “typical budget posturing” from people staking out their positions. At the same time, he said the council was far from reaching a consensus.

Corbett told council members that he favors a “freeze” on property taxes, and he asked City Manager Jim Prosser to have his department heads look for smaller items in their budgets that they might cut to save some money. Council member Kris Gulick supported the latter idea.

Corbett also suggested that the city look at tapping into its general fund reserve for revenue for the fiscal year beginning July 1 instead of raising taxes. Council members Podzimek and Gulick weren't too sure about using reserve funds.

City Manager Jim Prosser and Casey Drew, the city's finance director, noted that city policy has required a general fund reserve of 25 percent of the city's general-fund operating budget, and that the fund, currently at about $26 million, is at about 32 percent of the operating budget, Drew said.

Drew told the council that if it keeps staff levels at the current level – the equivalent of 1,424 full-time employees – the city would be short $2.265 million in the next budget year.

Property taxes would need to go up 6 percent for homeowners and 3 percent for commercial and industrial taxpayers to close that gap if nothing else changed, he said.

With $30 million in new debt for capital improvement projects, taxes would go up 8.9 percent for homeowners and 5.9 percent for commercial and industrial taxpayers if everything else stayed the same.

Shields said he thought the cutters would win out over the spenders, and he said, as a result, people would leave because the flood-damaged city would not get rebuilt. Karr countered, saying that people will leave if taxes go up because they're sick of paying higher property taxes.