No tax increase in approved city budget

Published 9:34 am Wednesday, June 6, 2018

Franklin’s City Council voted 4-1 with two absent to approve its fiscal year 2018-2019 budget on Monday during a special called meeting. The final budget does not include any increase to the city’s real estate tax rate.

The council had previously debated whether to increase the city’s real estate tax rate by up to 5 cents per $100 of assessed value during a work session on May 23. The revenue from the proposed increase would have been used to allocate an additional $170,000 in local funds to the city’s schools and to provide raises to city employees of up to 2 percent.

Franklin City Public Schools Superintendent Tamara Sterling and the city’s school board had requested the increase in funding to hire two additional middle school teachers and three security guards, one for each school. However, during the work session, the council had questioned the return on investment it had received after increasing its local contribution to the schools in the past, and had recommended only granting the school division level funding in the amount of $5,037,395. This decision was made final following Monday’s vote.

Though the additional funding for the schools was cut from the final budget, the raises for city employees remain, albeit no longer tied to a tax increase. Effective July 1, hourly employees will receive a 2-percent raise and salaried employees, a 1-percent raise. The funds to do this, according to City Manager R. Randy Martin, will come from cuts made elsewhere in the budget and other increases in revenue.

One of these cuts, Burgess said, was to the city’s worker’s compensation insurance. He explained that the city recently had a reduction to the premiums it must pay thanks to safety programs it had put in place.

The dissenting vote on the budget came from Councilman Greg McLemore, who took issue with the proposed raises for upper management positions and with the council’s decision not to fund additional money to the schools.

Councilman Benny Burgess, however, felt that the raises were justified given that the city’s health insurance premiums will increase by about 30 percent, also on July 1. Burgess said that this would be the first time in the past two to three years that city employees had received a raise and that without the raises, some employees would have experienced a net decrease in pay once the new insurance rate took effect.

He added that per his recommendation at the May 23 work session, the council had also discussed lowering the city’s real estate tax rate to keep it revenue neutral in light of the recent increases in residents’ assessed real estate values. But ultimately, he and the rest of council agreed that doing so was not feasible given the increase to the city’s health insurance costs and other new expenses. As a result, the city’s rate remains at 99 cents per $100.