Member Login

Premium Content

In Divided Vote, Mayor & 2 Commissioners Vote for Property Tax Increase

In a divided vote, the Covington city commission approved an increase on property taxes Thursday night.

Mayor Joe Meyer was joined by Commissioners Tim Downing and Michelle Williams in approving the tax increase.

Commissioners Jordan Huizenga and Bill Wells were opposed.

"This tax increase is going to generate about $328,000 and it's going to cause even more of a burden on citizens of Covington," Wells said. He offered recommendations as alternatives: eliminating nearly $722,000 in the line-item budget for the Covington bicentennial which took place two years ago, filling the vacant tax auditor position to collect outstanding taxes and fees, removing the constituent services representative from the city manager's office to save $100,000. He credited the previous city commission, which he was a part of, for buying more than 30 new police cars, 3 new fire trucks, and 4 ambulances to ease the burden of the city's aging fleet.

As to the constituent services representative, Wells said that that is the job of the city commission.

Prior to the deliberation over the increase, City Manager David Johnston reiterated the recommendation for the increase - which was first presented by the interim city manager Loren Wolff, citing forthcoming issues like an increase in pension costs and the loss of revenue when the IRS vacates its facility in the city in the fall of 2019. The blow to Covington, when all is added up, could be more than $4 million in the coming years.

Huizenga said that a better growth strategy needed to be developed rather than relying on tax increases.

"The only way we're going to weather the storm to come is to spend within our means through responsible budgeting, through planning for capital replacement, not through taxing," Huizenga said. "In my mind, the most critical thing we should be doing is spending within our means, not raising taxes in order to answer needs we've known about for some time."

Meyer said that even though the amount raised from the tax increase is low on an annual basis, over a 10-year period it means millions more in the city's coffers. He also cited Huizenga's and Wells's vote in a previous commission to increase the insurance premium tax. "That's far more significant and burdensome on the people of Covington than a 1.4-cent increase in the property tax," the mayor said.

Wells said that when the insurance premium tax was adopted, it included a sunset clause, which means that it expires in the coming years.

Meyer argued that less than half of Covington's properties are owned by citizens, which means that the brunt of the tax increase approved Thursday would be felt by investors rather than residents.

Downing called the increase a life boat to get the city to shore as it faces the daunting financial challenges ahead. "I don't see how we can sustainably remove $3.5 million from our current budget and do that in a responsible way without damaging our effectiveness in terms of city government," Downing said. "The reality is, we can make this a discussion about binary black and white - should we have a tax increase or not, but it's more complicated than that.

"If we don't take small steps now, we'll have to take larger steps in the future."

Williams said that the opposing commissioners have previously supported increases in other fees. "For me, this is about preparing for the future of Covington and if you care about Covington then you got to look at the bigger picture here, that we have to realize we need finances to run this city, and we can't nitpick. It's OK to increase the insurance tax and go ahead and raise waste fees, but why not just go ahead and agree that right now this is a small pot of money," she said. "It's not going to have any tears from anybody. We had a public meeting, I didn't see anybody make a comment. It's obvious that this insignificant amount of money is insignificant to residents but it can mean a lot to us for the crisis we have to deal with."
 
"Taxing the people of Covington is not creating growth," Wells responded. "It's pushing people away. I've never seen people come to the city because there was a tax increase. I've seen people move out because of tax increases."
 
Johnston recommended that the ideas gathered during Thursday's discussion be explored through priority-based budgeting in the future, a process that would begin the city's budgeting cycle earlier and include broader discussions with the community.
 
In the meantime, the tax increase passed 3-2, and increases real estate property tax from 0.313 to 0.327 per $100 of valuation, and for real property from 0.3332 to 0.349 per $100 of valuation.

Written by Michael Monks, editor & publisher