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City property owners caught a likely break in their upcoming tax bills Thursday night when the city council rejected its own earlier plan to raise the tax rate 4 percent.
Council members voted last month for the 4 percent increase, but reversed course and will now likely opt for what's called the "compensating rate," which gives the city the same amount of revenue it had a year ago, plus revenue gained from new homes or businesses.
That rate will provide an estimated $883,822 in revenue from real estate, about $27,000 more than the city received a year ago.
The 4 percent increase would have provided about $65,000 more than a year ago.
Council members cited concerns about the economy in reversing their previous votes. Changing their votes from the previous meeting were council members Larry Giles, Bobby Durr, Rose Cunningham and Ken Evans. Council member Sandy Goodlett, who voted for the increase at the previous meeting, was absent.
Council member Brenda Gritton voted against the increase at both meetings.
Following a 15-minute public hearing that did not include any public comment, Giles reversed said he could no longer support raising the rate over the compensating rate.
"We have people in bad shape," he said.
Evans agreed, and took a poke at the Anderson County Fiscal Court in the process.
"Everyone's getting taxed to death, and the fiscal court just stuck us with another one," Evans said, referring to the court's recent decision to create a special taxing district for the Anderson County Cooperative Extension, which adds $16 for every $100,000 in assessed value.
Evans, who insisted his decision to change his vote has nothing to do with the upcoming city council elections, said he has received calls from residents who tell him the city needs to tighten its belt.
Durr said he knows of an 86-year-old woman who is babysitting to try to make ends meet.
"That's not right," he said.
Gritton, who voted against the measure previously, said it's the city's turn to cut back on spending, just as residents are being forced to do.
"I was the only one who voted against this before," she said. "This would be the worst time ever for a tax increase. [The city] for once needs to sit back and tighten its belt."
Mayor Edwinna Baker said during the meeting that taking the lower rate could affect pay raises for city employees next year. Asked Friday to clarify, Baker said it's still too early to know what the affect will be.
"I don't have a clue right now," she said. "Until we get into February or March and see what the winter months do to us, we won't know. After that, we'll have to sit down and look at everything."
Baker said Friday that she is "fortunate" to have a seasoned city council.
"They set the policies and I have to live and work within their budget," she said.
"I think they all voted with what they thought was the right thing to do."
Baker, who characterized the city's fiscal condition as "good, but not great," said she shares the council's concerns about the economy. She said one of her concerns is that people will not be able to pay their taxes by the Jan. 1 deadline, and will opt instead to absorb the city's late fee and pay them after getting money back from their tax returns.
She said like homeowners, the city has to deal with rising energy and fuel costs.
"Utility bills go up constantly," she said. "When Bluegrass Energy raised its rates, everything at the waste treatment plant more than doubled."