Maryville seeks sales tax increase
By Iva Butler | (email@example.com)
Maryville City Council is moving to hold a referendum Nov. 5 on increasing the sales tax rate from 9.25 to 9.75 percent.
The sales tax increase would generate an estimated $2.5 million a year, which is equal to 32 cents on the property tax rate, said Maryville City Manager Greg McClain.
Council has indicated it would rather increase the sales tax than the property tax, which has not been increased in five years.
If the sales tax increase is approved, schools would get about $1,250,000, and the city general fund would receive the remaining half.
At a combination called meeting/workshop Thursday morning, McClain and Director of Schools Stephanie Thompson outlined the revenue shortfalls they are facing and needs that are not being met.
Over the last five years, since the economy entered what many are calling the “Great Recession,” Maryville cut 37 employees (11 percent of the workforce with no layoffs), cut unnecessary costs and found efficiencies to weather the storm, McClain said.
“It has come at a price in regards to keeping up with infrastructure repairs, maintenance costs and equipment replacement,” he added.
Equipment failures rise
“We are beginning to see catastrophic failures in equipment,” with street sweepers blowing apart and knuckle booms damaged past repair. Replacements had to be paid for out of the fund balance.
“What we are asking is to take care of what we own,” he said.
The parking garage deck at West Broadway Avenue and Cates Street needs $400,000 to $500,000 in repair and maintenance and parks have a tremendous backlog of needs, including a deteriorating pool house at John Sevier and trail paving.
Other infrastructure repairs are needed for buildings, roads, sidewalks, parking lots and retaining walls.
Thompson said in the six years that she has been director of schools, there has been no additional funding from the city.
Being a school system, administrators had federal and state funds available that helped schools weather the economic downturn.
Also, previously they were beneficiaries of the split share of county building projects, which is almost gone.
They made cafeteria changes to make it self-supporting, cut positions in the central office and even closed Fort Craig School of Dynamic Learning in order to open Coulter Grove Intermediate School, she said.
Enrollment is up nearly 200 students this year, requiring additional staff, she said.
They also need money for operating expenses, capital needs (like maintenance issues such as roofs and installing a secure entry at Maryville High School) and health care costs.
She said they now need additional revenue from the city.
Last raised in 1980
The last time Maryville raised the local option sales tax rate was 33 years ago in 1980,
when it was increased from 1.50 to 2.25 percent.
One thing about the sales tax is that much of it is paid by people who live outside the city, McClain said, adding that many of those people use the parks, roads and other amenities,
Council voted on first reading to call for the referendum.
Final reading on the ordinance is expected to be done at the next council meeting on Sept. 3. After the second reading, council is expected to vote on a referendum.
While Maryville will be paying for the special election, voters are used to voting in November, McClain said.
The city of Alcoa is already receiving the 9.75 percent sales tax, the maximum local option allowed.
Alcoa citizens voted Aug. 2, 2012, to increase the sales tax, which has thus far generated $2,253,745, which is earmarked for the new Alcoa High School.
Alcoa started receiving the additional taxes on Oct. 1 after merchants were given about 60 days to make changes to accommodate the increased amount. The city started getting payments from the state two months later in December for October purchases.
A countywide election on the issue mounted by Blount County failed Nov. 6, 2012.