Dover City Council members gave final approval to the city's $134 million Fiscal Year 2013/2014 budget in a split vote that reflected some members' concern that additional revenue – i.e., taxes – is needed sooner rather than later.
The issue of immediately increasing property taxes was broached during discussions on setting that tax rate for the upcoming fiscal year.
Councilman Tim Slavin used the occasion to bring up his opposition to the overall budget, which uses $620,000 left from the FY 2012/2013 spending plan to balance the city's accounts for FY 2013/2014.
"I can't support a budget that spends more than half-a-million dollars than it brings in," Slavin said.
During budget talks in late May and early June, council members rejected attempts to raise property taxes for the upcoming fiscal year, which starts July 1. This was despite warnings by City Manager Scott Koenig and Finance Director Donna Mitchell that the city will face numerous problems, including rising deficits, unless new income is found.
Slavin echoed those warnings, noting the city will be $7 million in arrears by 2017 if income and spending remains the same.
The councilman also was concerned because figures provided as of June 18 show the city will have a $278,000 deficit in projected transfer taxes.
The result, Slavin argued, is that part of the $620,000 the city was hoping to carry forward will not be available to balance the FY 2013/2014 budget.
In supporting Slavin's argument, Councilman Sean Lynn used figures provided by Mitchell to bring home his contention that property taxes must be raised at some point to avoid the projected 2017 deficit. He put forward an immediate increase of five cents to the proposed property tax to help avoid that deficit and to raise funds for infrastructure improvements.
That attempt failed, however, when Councilwoman Beverly Williams, who had made the motion to set the property tax rate for the new budget, refused to support Lynn's move to amend it.
Several minutes of discussion followed, with Williams and council members James L. Hutchison Sr. and William Hare arguing additional work needs to be done to cut spending before agreeing to any tax increase.
"Down the road, there is no question that taxes will go up," Hutchison said. But, he added, "I won't support a tax increase until I look at every department. I won't support it until we get the facts."
By the end of the discussions, however, council retained the current property tax rate at 0.3378 cents per $100 of assessed value. The vote was 6-2, with Lynn and Slavin voting in the negative.
By contrast, moments later council unanimously agreed to lower city electric rates, and, minutes after that, passed the entire FY 2013/2014 budget. That vote was 6-2, again with Lynn and Slavin voting against.
Page 2 of 2 - Regarding the budget and future spending, Council President David Bonar had words of warning for council members and for city residents: there are more challenges ahead.
"We'll be facing the same issues next year, and probably before that," he said. The discussion on raising taxes versus cutting spending is just beginning, he added.
"There is a lot of examination and a lot of research needing to be done," Bonar said. "A $7 million outfall is not something we can solve by budget cutting or cutting overtime."
In other actions
Council declined to support a proposed change to Delaware law that would grant a leave of absence to elected officials called to military service. The bill, proposed by Rep. W. Charles "Trey" Paradee (D-Dover West), also would have given municipal bodies the opportunity to appoint a temporary replacement while that official is away.
A majority of council seemed to feel Dover already has procedures in place to address the issue of any extended absence by one of their members. They ultimately turned down the proposal by refusing to vote on it.
Paradee said afterward this bill was different from an original proposal that would have allowed elected officials to take part in meetings while deployed. That idea conflicted with Freedom of Information Act provisions and also raised problems with military officials.
Paradee said he plans to bring up the legislation again during the next legislative session, beginning in January.