Asheville City Councilman Vijay Kapoor said he favors considering a property tax increase to help the city close a looming $1.7 million budget gap in its 2018-19 fiscal year spending plan.
Kapoor made his statement at an April 10 budget workshop. It came during a discussion about how much of a pay raise to give city employees, and how much of the city’s fund balance reserve City Council should use to help offset its budget deficit. City Council is working toward a June 30 deadline to approve a balanced budget.
Kapoor said he would be open to considering a property tax increase to help pay for a 3 percent pay raise for all employees. “In the current economic climate, we deliver services and I think our biggest investment out to be in people here providing services,” he said.
Council members had discussed various options regarding the employee salary increase, including: offering a 2.5 percent pay increase instead; instituting an across-the-board salary freeze; or phasing in a pay increase, with lower-paid employees getting an increase first.
As the conversation continued, Kapoor again brought up a possible property tax increase. Mayor Esther Manheimer responded emphatically that, while she shared Kapoor’s reservations with dipping into the city’s fund reserve to help balance the city’s budget, “I don’t support a property tax increase this year.”
Manheimer said there are a number of variables regarding city revenues for the coming year, including whether or not Mission Health is purchased by a for-profit company, which would bring the city about $7 million in new property tax revenue.
Asheville City Council raised property taxes 3.5 cents per $100 of property valuation last year. The budget funded a pay increase for city employees, new sidewalks and greenways, improvements to the city’s bus system and new police officers and equipment for the Asheville Police Department.
Manheimer seemed to end the debate about what to do regarding employee pay raises, saying that she favored a 3 percent increase, as did fellow City Council members Gwen Wisler and Julie Mayfield, as well as Kapoor.
“I think we need to find another way to cover this gap,” she said.