BERLIN– Elected officials approved a one-and-a-quarter cent tax increase in Berlin this week.
After several failed attempts, the Berlin Town Council on Monday voted 4-1 to approve a tax rate of $0.8275. The vote came after several motions for rates higher and lower failed to pass.
“It’s been a challenging budget cycle,” Mayor Zack Tyndall said.
Last week, Tyndall instructed staff to include an 83.5-cent rate in the tax rate ordinance in advance of Monday’s public hearing. He’d suggested the two-cent increase and the use of impact fees for some capital projects could close the $325,000 deficit in the proposed fiscal year 2024 budget.
On Monday, Councilman Jack Orris quickly made a motion to set the tax rate at $0.815—the current rate.
“Two cents is not going to get us all the way there,” Tyndall said of closing the deficit. “Councilmember Orris I hear you on the 81.5 but I have no clue how you’re getting there.”
Tyndall said from a fiscal standpoint it was more prudent for officials to do what they could to put the town in a good financial position.
Orris, who earlier this spring suggested the town transfer $400,000 that’s in a capital reserve fund for town hall improvements to the general fund to balance the budget—said he’d made his proposal clear.
Councilman Dean Burrell said officials couldn’t talk about the tax rate without talking about the budget. A key piece of that budget is a $200,000 contingency line item intended to be used for pay increases recommended by the salary study recently conducted by PaypointHR.
“It needs to be shared and folks need to know what we’re looking at and the direction we’re trying to go,” he said.
Tyndall said it was a draft report and not in a state to be shared with the public.
Councilman Steve Green agreed that the salary study was linked to budget discussions but said he had a question about revenue. In reviewing Worcester County’s proposed budget, he said the county showed the town receiving $520,000 in income tax revenue. The town’s proposed budget, however, shows income tax revenue of $400,000.
“In my mind that revenue’s being underreported,” he said.
Finance Director Natalie Saleh said she tended to budget conservatively, especially with revenue that was dependent on taxpayers. She agreed however to revise the revenue line item to $500,000.
Tyndall agreed with Saleh that revenue could vary.
“If we move the needle we need to understand we’re going to the upper limit of what’s projected,” he said.
Saleh said that even with the additional $100,000 in projected revenue, the town was not likely to get the $122,000 it had requested from the county for EMS staffing.
Orris said that he felt the council could just move the capital reserve funding for town hall into the general fund.
“I believe that it can be done,” he said. “I don’t think anyone’s under the illusion taxes will never go up but I don’t think they need to go up right now.”
Burrell said he still had a problem with the fact that the salary study wasn’t available to the public.
“It’s not ready yet,” Tyndall said, stressing that the $200,000 contingency in the budget would address the salary study findings when the time came.
Saleh reminded officials they hadn’t increased the tax rate last year. She said that using capital reserve funding would just delay necessary capital improvements.
‘It’s going to come back up next year,” she said.
Resident Cam Bunting said weighing needs was a part of the budget process every year.
“I don’t see this building falling down,” she said.
While Councilwoman Shaneka Nichols seconded the motion by Orris to maintain the current tax rate, it failed with Green, Burrell and Councilman Jay Knerr opposed. Green suggested a compromise. He said he never wanted to see the town have to implement the 12-cent increase it had in 2019. He suggested a tax rate of 83 cents, which he said would equate to about $5 a month for someone with a home assessed at $400,000.
Orris said even if an increase was small it still had to come from somewhere else in a household budget. Nichols said the idea of a $400,000 home in her district was laughable.
“There are people who can’t even afford to pay for their medicine at Rite Aid,” she said.
Knerr said he understood the concern about increasing what residents had to pay but felt a one cent increase was reasonable.
Burrell said he knew what Nichols was talking about but went on to voice support of Green’s proposed 83-cent rate.
“These are the same folks who want their street paved and trash picked up,” he said. “There’s only two ways in a municipality to raise funds. To increase tax or growth. I believe if we’re going to sustain, and this is not being lavish or going overboard, if we’re going to maintain the quality of life for folks who can still afford to live in Berlin something just needs to be done.”
Burrell seconded Green’s motion for the 83-cent rate but it too failed with a 2-3 vote, with Knerr, Nichols and Orris opposed.
Town Administrator Mary Bohlen said the proposed budget was based on the funding it took the town’s departments to operate. She said the services the town provided were driven by feedback from citizens.
“This is how we have come to where we are today,” she said. “There’s nothing in the budget that is fluff. There are things that if we don’t do it this year we’re going to have to do it next year or the next year or so on.”
Burrell, who’s in his eighth term as councilman, said he’d seen needed repairs and improvements get delayed.
“That is not a way to provide services to our citizens, on a wing and a prayer,” he said.
Burrell recalled what bad shape the electric department had been in before the town invested in improving it.
“That has been a major investment,” he said. “I think that’s what the citizens of Berlin expect.”
Human Resources Director Kelsey Jensen said the salary study contingency funding would be used to improve the salaries of about 45 general fund employees who were underpaid.
“That is something that is a big lingering thing right now,” she said. “It’s frustrating because as someone that’s trying hard to hire people and get people to stay it’s becoming more and more challenging every day.”
Knerr asked why staff didn’t recommend doing the transfer of funds suggested by Orris. Saleh said the town had set up the reserve fund to allow for repairs to aging infrastructure. She said the transfer could be made but would not be “good practice.”
A motion by Knerr for a rate of $0.825 failed to get a second. A subsequent motion by Orris to retain the $0.815 rate again failed with a 2-3 vote. Nichols said the process felt fragmented because the council was being asked to set the tax rate before people were given the opportunity to share their thoughts about the budget itself.
“If nobody in here is in agreement about the budget what are we doing?” she said.
After another failed motion to set the rate at $0.83, Green said he’d talked to residents and they hadn’t objected to a reasonable increase.
“The consensus was move our town forward, not backward,” he said.
Tyndall pointed out that no citizens had opposed the idea of a $0.835 tax rate during Monday’s public hearing.
Knerr said the council had agreed to pursue small incremental tax increases two years ago.
“We didn’t do it last year,” he said.
He said he’d hesitantly propose a compromise of a $0.8275 tax rate, a one-and-a-quarter cent increase. Green seconded the motion, which passed 4-1 with Orris opposed.
The $0.8275 rate is projected to bring the town an additional $64,407 in revenue in the coming fiscal year. With the tax rate now set, budget deliberations are expected to continue following introduction of the budget on May 8.
