Council directs staff to move forward with budget including proposed tax hike

After hearing two hours’ worth of public comments in favor of and opposing the proposed property tax increase, the Plano City Council decided to move forward and formulate the 2009-10 fiscal year budget to include the hike.

The recommended budget for the 2009-2010 fiscal year, which begins Oct. 1, totals to about $405.5 million. Though the recommended budget is down about 0.55 percent from the current year’s budget, City Manager Thomas Muehlenbeck proposed a tax hike of 1.51 cents to 48.86 cents per $100 of assessed property value to help the city recover lost funds.

Should the tax increase be approved Sept. 14, the average homeowner with a house valued at $250,000 would pay an additional $30.15 per year. It would be the city’s first tax rate increase since 1990.

“Having 22 years of preparing and administering budgets for the city of Plano, I feel we are in a very tenuous position. With falling property values, falling sales tax revenues, falling building revenues, general reduction of fees across the board and a reluctance to consider a tax increase, we are at a point that major services may be ceased,” Muehlenbeck said. “If we cannot find a way to keep Plano services as our citizens have expected, I am concerned that we will move from a city of excellence to one that people no longer use as a comparison; to one that really isn’t thought of by its citizens as the most desirable place to live; and to one, as an employer, that will have a hard time attracting those employees that can make a difference.”

For weeks, the council has been faced with the difficult decision of raising property taxes. The council has the option to cut services to prevent a tax increase or maintain the quality of services and overcome the deficit by raising taxes.

The speakers at Monday night’s council meeting were evenly divided. Many spoke to support maintaining Plano’s high quality of life and city services with a moderate tax increase, while other spoke about needing to identify more cuts to curtail excess spending on services not used by all Plano residents.

James Craft told the council he moved to Plano for the high quality of life.

“I do not want to see that jeopardized because we can’t do a tax increase,” he said. “I am 100 percent behind Mr. Muehlenbeck’s call for tax increase. You’re talking about less than 10 cents per day to have the high quality of life that we have here in this city -- that’s not a whole lot of money, not a whole lot of money at all.”

Compared to other cities in surrounding counties, Craft called living in Plano a bargain because of the numerous city services provided to residents.

“And even if we had to do the tax increase, it’d still be a bargain,” he said. “I would encourage you to consider the 1.51-cent tax increase.”

Kelly Dougherty also said that he moved his family to Plano to reap the benefits of the city’s high-quality services.

“Through the years I’ve relished the fact that Plano government makes it look easy to deliver not just the essentials but also the nice-to-haves,” he said. “My five daughters have all graduated from Plano Senior High School and have moved on, but they remember Plano as a magical place to grow up. I think I’ve got a good bargain with Plano city taxes. I don’t have a problem with [the council] raising them a little bit as long as we go ahead and try to keep the quality of life we’ve got.”

The council also heard numerous comments against the projected property tax increase.

Former Mayoral candidate David Fincannon argued that, given the current economic condition, it is not the right time for a proposed tax increase. Fincannon quoted a passage that Indiana Governor Mitch Daniels wrote in the State of The State Address.

“First, no tax increases. A state striving for economic greatness should constantly be looking for ways to reduce its burden on workers and enterprise. A time of recession is the very last time at which government should add to the struggles of the citizens for whom it works. Preserving government intact at the expense of families and businesses would be wrong in human terms and backwards in economic terms,” he read.

Fincannon urged the council to reconsider the timing of the tax increase.

“I think we need to give this community a chance to recover,” he said. “And maybe in a year, if we don’t do taxes right now, we will recover and the city of Plano will come out stronger for it.”

Resident Robert Woods also spoke out against the tax hike.

“I understand the increase will cost the average citizen about $3 per month; that’s not all that offensive when taken individually,” he said. “On the whole, though, that’s quite a bit. That’s $7 million that residents won’t spend on products and services in the community because city government first has the right to that money. That’s the part that is offensive.”

Woods said the “tax-and-spend” strategy is not a successful management strategy, noting that many states, including New York, Massachusetts, the Great Lake states and California, have all taken the same approach and failed.

“The state of Texas, with its limited government and somewhat unobtrusive taxes, was the last to enter the recession, is experiencing it the least and will get out of it first,” he said. “And that says a lot, so I hope we can continue to manage our budget.”

Woods suggested that city staff reevaluate the city budget to find more budget cuts. His suggestions to the council included decreasing the frequency of watering city parks and land and to minimize school bus stops to maximize gas efficiency.

“I am here tonight to cast a vote for opposition should tax increases come at time when we most need our money at home,” he said.

After a brief discussion, the council provided no objection to going forward with the current budget to include a property tax increase. The council will vote to adopt the 2009-10 fiscal year budget, Community Investment Program and set the city’s tax rate on Sept. 14.

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