Crestwood Mayor Roy Robinson knows that some of the city’s voters believe any new tax is a bad tax.
Truth be told, the man himself said he isn’t too fond of new taxes in general. But when it comes to raising the tax rate to help retire more than $3.5 million in debt and credit expenses accrued by the city, Robinson said Proposition S is necessary and hopes voters feel the same way on April 4.
“This is so important to the city,” Robinson said. “We’re moving forward in order to get our city what I call ‘back.’ It still belongs to us, but it’s held in collateral. This debt was here when I got here. What I’m trying to do is eliminate the debt that’s accumulated. Plus, instead of having to go to the bank every year to use a line of credit, I’m trying to establish a fund where we’re not paying interest. You’ve just got to have that in place.”
Crestwood voters will consider April 4 whether to approve a tax-rate hike of an additional 20 cents on each $100 of assessed property value. If approved, the city’s tax rate would increase from 24 cents per $100 of assessed property value to 44 cents per $100 of assessed property value. Crestwood residents previously paid as much as 45 cents per $100 of assessed property value in the mid-1980s.
If passed, the tax would last seven years and accumulate an estimated $540,000 per year. That figure would add up to $3.78 million across the proposed tax’s seven-year life.
Those funds would be used to pay off an estimated $2 million in city debt and an estimated $1.5 million in line-of-credit expenses during those seven years.
“In seven years, we believe we can eliminate the debt,” Robinson said. “And we can also establish a non-expendable trust fund that will be utilized as our working capital so that we don’t have to borrow money to pay interest to the bank on this type of money. If we borrow money from that non-expendable trust fund to make payroll or whatever, when the tax revenue comes in, it will be restored so we have it available at all times. That’s the way we won’t be beholden to the financial institutions.”
But while Robinson said he is sincere in his request for additional funds from city residents and that the money would only go to paying off the debt, some citizens are skeptical.
Resident Jim Murphy, a former state representative and former Crestwood alderman, said while he is encouraged that city leaders are making an effort to shore up finances, he does not believe they have a solid plan to use those funds wisely enough to pay off the city’s debt.
“The problem is that if we go ahead and coat the problem that we now have and say, ‘We don’t have to worry about the details, let’s just go to the conclusions,’ we’ll continue on a constant increasing tax,” Murphy said. “Every year, we’ll have to have a new tax because we’re not looking at the details.”
Murphy, through his work with the Crestwood Citizens for Fiscal Responsibility, said he believes the city’s Board of Aldermen has been too frivolous in spending during the past few years. He believes that before the city can ask residents for more money, its leaders should formulate solid invoices for each dollar spent to determine exactly how money is used on day-to-day operations.
If not, Murphy said the extra potential funds raised from Proposition S would also not be spent wisely.
“I would give each alderman an F-minus in management,” Murphy said. “When you go into government, you are going into a trust position. And you’re looking at other people’s welfare. And you swear that you’re going to uphold that, and it’s evident they haven’t.”
But Crestwood Ward 3 Alderman Jerry Miguel said aldermen have been working to save money and believes the city’s 2006 budget is the most conservative the Board of Aldermen has worked toward in some time. He pointed out the city’s combining of its public works and parks and recreation departments saving an estimated $350,000 in payroll and also a salary “semi-freeze” imposed in 2004 that still is in effect.
As for Proposition S, Miguel said he supports the proposition despite the fact that he does not like the idea of new taxes. But considering the funds that the city has borrowed from Southwest Bank in recent memory, Miguel said he is more inclined to support the property tax increase.
“Looking at what the city’s borrowings have been from Southwest Bank, the city had to borrow as much as $2.9 million in 2005, and I believe that occurred in November,” Miguel said. “This year, I believe the peak lending amount has been about $2.7 million, and it’s currently at about $2.6 million. The bottom line is while I may not like it and I really felt badly asking citizens for a new tax, I think it’s necessary to address the problems and mismanagement done in the past. If the tax passes, with solid leadership and direction, it will work.”
To spread the word about how the proposed tax will work, aldermen have scheduled town hall meetings in each of Crestwood’s wards this month.
The next such meeting is Robinson’s town-hall gathering, which will take place at 7 p.m. Tuesday at the Community Center in Whitecliff Park.
While Robinson said the meetings are simply a way to educate people on Proposition S, Murphy said the meetings he has attended have been nothing more than the issue’s supporters rallying around the tax increase.
“I’m just a quiet, little, white-haired old man listening to the proponents speak,” Murphy said. “There’s no need for us to have an argument in this situation. My approach is always from detail.”
But Robinson said he and city aldermen have addressed the details and are confident that citizens will reward them.
“We run real close to the amount of revenue that we receive and what we have to pay to keep the city going,” Robinson said. “For those naysayers, I say we are watching what we spend. We’re evaluating everything from cell phones to how we purchase supplies to how we do other things in the city and make sure there’s true justification needed that is done. People just don’t go out and spend the money because they want to. They have to justify the expenditure.
“In reality, what this proposition is going to do for us is it’s going to take a difficult situation off our backs every year it’s out. The city is in a bad way. It’s not making ends meet, and it may be that we’re not spending money properly. But if it’s there, as I tell the people at the board meetings, I have no magic wand to clean this thing up. All I can do is say: ‘Folks, I have to pay the taxes the same as you do.’ I live here. My family’s here. We all hate taxes just like every other person that pays it. But if we’re going to keep our city going forward and get (debt) behind us and get our buildings back, we need to provide the funds to pay this thing off,” the mayor said.