Deep divide on council over budget: 5-4 to hold line on taxes

CEDAR RAPIDS - Mayor Ron Corbett secured a City Council majority of five votes a month ago for a hold-the-line-on-taxes budget, but the four council members in the minority minced no words before last night's formal budget vote in telling the mayor he was wrong.

Council member Kris Gulick said, as he did during a budget meeting last month, that he couldn't support the council's $95-million general-operating budget because to balance it required taking $1.8 million from the city's cash reserves.

“That's deficit spending,” Gulick said. He feared such a practice would jeopardize the city's long-held, top Aaa-bond rating, which if lost, could cost the city some $3 million more in interest payments, he said.

Corbett would have none of it.

Corbett asked Gulick and three others who voted against the new budget - Tom Podzimek, Chuck Wieneke and Pat Shey - if they had called it “overtaxing” in the years in which city councils were taking in tax dollars and building up cash reserves. He has noted that the city continues to have 31 percent in its general-operating budget cash reserve even though city policy only suggests a 25-percent reserve.

“If ever in the history of our community it was time to dip into the ‘rainy-day fund,' this would be it,” the mayor said.

Podzimek, Wieneke and Shey argued the reverse, that this time of flood recovery was a time in which residents would understand that city government needed to ask a little more in taxes to move the city ahead.

Podzimek said borrowing from reserves when so much needed to be done was like him spending his savings while the roof of his house was collapsing around him.

“We don't really know where we're going to go, but we're going to be cheap about it,” Podzimek said.

Corbett asked for a little perspective, and he pointed to cities across the nation that are laying off police officers, closing fire stations and turning out every other streetlight. He pointed, too, to a small local business -- it will see the city portion of its property taxes frozen at the current rates in the new budget - that just cut off its employees' health benefits.

By comparison, the new Cedar Rapids city budget was “a walk in the park,” the mayor said.

The budget includes a 5-increase in costs for employee wages and benefits, Gulick noted, and the addition of about five new employees in the Finance Department and no layoffs or furloughs, Corbett added.

Those voting with Corbett -- council members Monica Vernon, Don Karr, Chuck Swore and Justin Shields -- all talked about making sure in the next year the city attracted more businesses so the city could increase its tax base.

Shields, a local labor leader, though, made it clear just how shaky the Corbett budget majority is.

“All you fiscal conservatives, God bless you,” Shields told Corbett, a former Republican state legislator, and the others. Shields said he would try the Corbett way for one year, and if it doesn't work, he's back on the side of spending to improve the city.

The new budget freezes property taxes for commercial and industrial property owners and raises taxes 2.89 percent for residential owners. The increase for the latter comes because of a state formula that requires a larger percentage of the value of residential property to be taxed in the new budget year than in the current year.

On a separate vote, Podzimek and Wieneke also voted against the city's new capital improvement budget. It calls for the city to sell $26.5 million in bond debt, and Podzimek and Wieneke said the amount should be $40 million to keep up with city repairs.