This coming Tuesday, June 1st, will mark the start of the last month of the current Town Council and will also be their monthly legislative session. This council meeting will prove to be a very interesting meeting and I ask everyone who can go, to do so. The big issue, as has been for the last few months, is the Town Budget for the next fiscal year which starts July 1st. The budget shortfall now stands as just over $174,000 and now members of council need to decide and vote on ways to reduce that number.

Currently there are a couple of items under discussion to raise revenues which would help to reduce the budget shortage. The most popular method to increase revenues seems to be an increase of nearly eight percent in personal property tax (cars, boats, etc. – not houses or land). This increase, if approved, will bring in nearly $26,000 in funds from the citizens and an additional $27,000 in machine and tool tax which has its tax rate tied to the personal property tax rate. I do not like this plan for several reasons. First, no one can afford a tax increase in a year where many of us are seeing pay decreases or worse– unemployment. Second, a lower tax rate is a selling point when trying to get people and businesses to move to Pulaski. It will become harder to convince people and business to relocate to the Town if the tax rates are higher than in neighboring communities and counties. Finally, I think raising taxes in a down economy is a message we do not need to send to the community. In this economy, raising taxes is an act of desperation and though funds are less this year than the year before, I do not think desperate is how you would describe Pulaski.

The other revenue generating items are a twenty-five percent increase in the cigarette tax and the elimination of the first $50,000 in gross income being exempt from business licensing fees (BPOL). There will now be a $30 minimum charge for all businesses in Pulaski to get their business license. If approved, this will mean that businesses that once did not have to pay for their business license due to the exemption of the BPOL fee, will now have to pay at least $30 to obtain their business license in future years.

I do not agree with these particular changes either. The cigarette tax is being raised because cigarette sales continue to decline and it is an “easy” way for the town to generate money. I think that this is just picking on a group (smokers) who already pay a lot of taxes for their cigarettes and if this passes, will have to pay more. The cigarette tax revenue is going to continue to decline as more people quit smoking. By raising the tax rate, you only give more people another reason to quit which will in turn reduce the tax money received from cigarette sakes. The elimination of the exemption for BPOL does bring money into the town, but I believe this deters the creation of small business in town. If council insists on doing this, they need to create a two or three year exemption for all new small businesses, not just those who open shop in the enterprise zone (mostly downtown).

So, why is the town $174,000 over budget? Simple- the proposed budget for 2010 – 2011 includes a three-percent salary increase for all town employees. This is being done because a previous council (the council members of the year 2006, I believe) approved the creation of a step plan for all employees which would raise their salary each year they worked for the town and keep salaries competitive with other nearby communities. The problem with continuing the step plan is that it was created before the housing market and economy crashed. Now is not the time for pay raises, and after contacting all the Town Managers and County Administrators in the New River Valley, I found that Pulaski and Christiansburg are the only ones considering this. It looks like Christiansburg is rethinking their idea, so perhaps the Town of Pulaski needs to as well.

The cost for a three-percent/half-step pay raise for all employees is about $156,000 or 89% of the budget shortfall. If the raises were reduced by half to 1.5%/quarter-step, the Town’s budget shortfall would drop to $96,000. I think we need to seriously consider that as an option. By doing this, we still help our employees in a rough year but would remove $78,000 from the budget shortfall and get the shortfall into a more manageable position. With the shortfall being under $100,000 I would feel comfortable using unappropriated funds to cover the shortfall thus eliminating the need for any tax increases.

Raising taxes just so you can afford to raise salaries is a preposterous notion that I cannot accept. We cannot continue to use the fear of losing staff to the Cities of Salem or Roanoke due to wage differences as an excuse for spending ourselves into an eventual hole. The Town needs to live within its means whenever possible and this counts as one of those times when it is possible. Town Council has scheduled their legislative meeting with a public comment period on these proposed tax raises on this Tuesday, June 1st, starting at 7pm. I encourage everyone to come out and voice their opinion on this issue.

As a side note, though I do not take office until July 1st, I will be taking the Oath of Office prior to the start of this meeting. Feel free to stop by and see it happen and of course take pictures.

- Joseph