Michael HowlettStaff Writer
April 25, 2013
The Hillsville Town Council approved a proposed operating budget for fiscal year 2013-2014 on April 22 that is $10,000 less than the previous budget without reducing services. The budget will also roll back tax rates on real estate to those of 2007-08, and increase the meal and transient taxes by three percent.
The proposed budget for 2013-14 is $4,686,723, which is $734,767 less than the 2012-13 budget of $5,421,490.
In his presentation of the proposed budget to council, Town Manager Travis Jackson said he found the town has been operating in the red for the past five years. Apparently, previous councils had used transfer of retained earnings to balance the budget.
“The last five years, we have not been operating in the black. My challenge and your challenge is to get the town back in the black and build up retained earnings,” Jackson told council. “It’s all fixable. We want to do it in a way that we won’t have to put a strain on the taxpayers.”
Mayor Greg Crowder asked Jackson, “So, we’re losing $700,000 a year?” He also questioned how long it would be before the town went broke if council continued on the current course. Jackson answered three to five years, depending on new revenues and new expenditures.
As far as taxes, the real estate tax will increase from .18 cents per $100 to .22 cents per $100, while the personal property tax, and machinery and tools tax will remain at their current rate, .72 cents per $100. The increase in the real estate tax will be somewhat negated by the most recent assessments which are lower than the previous assessments. Because of the lower assessments, Jackson said most taxpayers will not see an increase in their real estate tax. Others may see an increase that will amount to about 1 percent.
Due to the new assessments, the town’s total real estate tax decreased 12 percent, from $225,995,700 to $199,037,900.
The biggest change came in the meals tax and transient lodging tax, both of which will increase from 5 percent to 8 percent.
“The nice thing about the meal and lodging taxes is they don’t generally affect local taxpayers, they affect mainly transients. That lessens the impact on local households,” said Jackson. “But that still is not going to generate enough revenue to get us in the black.”
The increase in meals and lodging taxes, “coupled with the return to the 2007-08 real estate tax rates will get us where we need to be,” added Jackson. “I would like to say we can reduce taxes, but we can’t do that. The town needs to operate as a business.”
Council unanimously approved the proposed budget and agreed to advertise it for a month, prior to a public hearing.