Taxes

Your Tax Bill and the City Budget

As a result of property revaluations and tax increases by the City and Buncombe County, many Asheville residents will see significant tax hikes.  We need someone on City Council who knows municipal budgets.

If you thought that we didn’t need someone on Asheville City Council who knew municipal budgets, then the property tax bill you’re received was a rude wake-up call.  As a result of property revaluations and tax increases by the City and Buncombe County, many Asheville residents will see significant tax hikes.  At the same time, City Council has already twice taken the unusual step of amending the recently passed budget to spend more money – once to require an additional $6 million for a scaled down version of the RADTIP capital project and again to add $441,000 from the City’s reserve fund for a new transit service provider contract.  As someone who advises local governments on their budgets, I’m becoming increasingly alarmed about the City’s financial situation and City Council’s oversight capabilities.  Let me explain.

First, Asheville has an unusual number of significant projects happening or about to happen at the same time.  In addition to RADTIP, which is the largest capital project in the City’s history, voters also approved borrowing $74 million for parks, infrastructure and affordable housing.  As I wrote about last month, RADTIP has already had to be scaled back even though its cost is $26 million more than expected and we still don’t have answers as to why so few companies bid on the projects, why the cost estimates were so far off and whether staff was instructed not to tell City Council about the high bids during the budget process.  Either RADTIP or the bonds by themselves would be massive projects – we’re planning to do both at once.

[As an aside, there has been some discussion about using the voter-approved bond money to go towards the RADTIP overruns.  I am absolutely opposed to doing so.  Taxpayers voted to approve the infrastructure and park bonds based on the projects described in them – not for RADTIP.]

Second, the recent budget process was also unusual in that it occurred during a year in which the County revalued residents’ properties.  When there are revaluations, it makes it difficult for taxpayers to fully understand what they will be paying until they actually receive their tax bills.  Some of you may be experiencing that right now.  During the budget process, I spoke at City Council to warn that it only include spending that is “necessary and justified” before it raises taxes.  At the end of the day, it’s taxpayers who have the pay the bill.

What We Should Be Doing

In my view, here is what we should be doing right now:

First, as I have said publicly to City Council on two occasions during the budget process, we need to have a five-year operating budget projection so that we know how the current budget may impact future budgets and tax rates.  Will we also need a tax increase next year?  With a five-year operating projection, we’d at least have an idea.  We don’t have any idea right now.

Second, we need to get to the bottom of what happened with RADTIP.  In particular, why did so few companies bid on the projects, why were the cost estimates so far off and was staff instructed not to tell City Council about the high bids during the budget process?  (To read a longer explanation of my view on the RADTIP process, see http://kapoorforcouncil.org/issues/radtip-mess)

Third, we need to be absolutely transparent about how the voter-approved bond money will be used.  Residents voted on those bonds based on the projects included in them.

Finally, I need to make one last observation.  In both the case of the budget amendments for the RADTIP overruns and the transit service provider contract, the bad news was publicly delivered to City Council by the Assistant City Manager, not the City Manager.  When I managed a staff in state government while working for former Governor Ed Rendell of Pennsylvania, I always made sure that I delivered the bad news and I let my staff deliver the good news.  With the red flags that I’m seeing on the City finances front, City taxpayers need strong oversight from City Council members and accountability from staff and I think that I’m the person who can make that happen.