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Summary of City Responses to President’s Tax Letter/February 2005

Mayor Euille

Joe thanks very much for your letter and suggestions.

 As I have stated for awhile now, Council will cut the tax rate, hopefully, not less than 8 cents; and more, if possible, once we get into the Manager’s proposed budget, which then becomes OURS, once we complete the process to adopt a new budget and a new tax rate.

Other solutions are certainly what are needed and I look forward along with my Council colleagues in working with everyone to advocate for equitable and fair tax ideas.


Bill Euille



Andrew McDonald, Councilman

Dear Mr. Gerard:


Thank you for your note. I think we all share the same concerns about the rise in property values and it's financial impact on residents. I would say, however, that the Mayor has proposed a significant, not a minimal, decrease in the tax rate. 


 I would agree that we need to find new ways, in cooperation with our state delegation, to deal with the overall problem. I'd like us to be able hold level the taxes that anyone who has lived here for a long time, over the age of say 65, pays. We can't do that now. We do rely heavily, some would say excessively, on property taxes to run our City government. Some have suggested that the solution is to encourage more commercial growth, but I think that's a red herring. My impression is that growth, whatever variety, without the added "smart growth" fees and contributions we should collect from developers, has not kept pace with the actual cost of development. Developers do not, in my opinion, pay anywhere close to their fair share of many costs.  The result: Taxpayers must spend more than we should have to run the City and sustain critical infrastructure repair projects, etc. Still, it's generally only a one-time contribution and thus only part of the solution.


We are faced with several issues difficult issues I think, including the difficult choice of cutting spending (for many valuable programs), and finding ways to cut costs and increase revenue outside of property taxes. We are looking at a variety of measures to help those folks who are having the hardest time paying their taxes, etc, including creating a tax deferral program. I personally don't mind paying an extra $500 a year  in taxes as long as I feel that we are controlling costs carefully -- not everyone agrees or can afford this increase. It may be necessary, therefore, to cut spending or find new taxes in order to more deeply offset the market rate of increase in property values. Alternatively, we could try to cap the rate of increase and simply try to formulate a budget that does not fund many important social programs, etc. I think we do need to examine all alternatives, in order to see more clearly what the real choices and costs are. Your participation in this discussion is essential.




Andrew Macdonald


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