City Council Sinks Tax-Hike Budget, Floats Uptown Baseball Subsidy
With a pair of votes that Democrat Mayor Anthony Foxx decried as being everything from “incongruous” and “irresponsible” to “troublesome” and “disgusting,” the Charlotte City Council on Tuesday night shot down a proposed 8-percent property-tax hike budget while approving an $8 million taxpayer subsidy for the Charlotte Knights’ uptown baseball stadium.
Let’s take a minute to break down Foxx’s acerbic, adjective-addled assessment of Tuesday night’s votes:
Incongruous? The mayor might have a point, but probably not the one he was trying to make.
“What is disturbing to me tonight about what this council has just done is that we have come down here, not approved a budget, not done the homework that is necessary to get this community going forward,” Foxx scolded councilmembers, “and we’ve approved a project that is probably a nice project but it is not a project that’s going to, in my opinion, transform this city over the next 20 years.”
In a 6-5 vote, four Democrat councilmembers (Michael Barnes, Patrick Cannon, Claire Fallon and Beth Pickering) joined the council’s two Republicans (Andy Dulin and Warren Cooksey) in rejecting the city manager’s recommended budget and its embedded 8-percent property tax increase to help fund a $926 million capital spending binge. Democrats James Mitchell, David Howard, LaWana Mayfield, John Autry and Patsy Kinsey voted to approve the tax-hike budget.
After voting against the budget, however, Dulin and Cooksey teamed with Cannon, Mitchell, Howard, Autry and Mayfield to approve the $8 million taxpayer subsidy for an uptown baseball stadium. Democrats Barnes, Fallon, Pickering and Kinsey voted against the largess.
Irresponsible? Got that right; but again probably not the way Foxx meant it.
“What has just been done tonight is perhaps the most irresponsible decision that I’ve seen the city council make in history,” Foxx fumed after the council voted to not foist an 8-percent tax hike on residents already rocked by a floundering economy and still reeling from a countywide property revaluation that saw tax bills skyrocket.
The irresponsibility that reared its ugly head Tuesday night came on the baseball vote, when a misguided use of taxpayer resources could have been stopped dead in its track if the council’s two Republicans had voted against the stadium subsidy. Dulin tried to cover his tracks by praising the deal ultimately reached with the Knights, who originally wanted $11 million from the city in a proposal that included a substantial property tax refund.
The $8 million package that council approved instead siphons $7.25 million from the hotel/motel occupancy tax, with the uptown booster group Center City Partners kicking in $725,000. Combined with Mecklenburg County’s largess of $8 million for infrastructure and upwards of $24 million in prime uptown property, which will be leased to the Knights for a sweetheart deal of $1 a year, public subsidy makes up more than half of the stadium’s $54 million price tag.
“This deal has been massaged and massaged and massaged,” Dulin said in voting for the stadium scheme. “We have squeezed wine out of the rock.”
Yeah, I know; it didn’t make sense to me, either.
Troublesome? The budget vote, no doubt, was troublesome for Foxx, but not so much for grassroots activism and fiscal sanity. Indeed, the tax-hike budget Foxx aggressively supported appeared on track for approval as recently as two weeks ago, when the council’s Democrat majority gave it a nod during straw votes. That changed after councilmembers were deluged with phone calls and e-mails encouraging them to vote against a tax hike during difficult economic times.
Homeowners, coupled with grassroots activists who launched a concentrated lobbying effort targeting at-large councilmembers, delivered a call for fiscal responsibility that clearly hit home with three of the four at-large Democrats.
“I just think it’s a terrible time,” Pickering said of the proposed tax increase. “I’ve looked at the totality of what our citizens are facing currently: we have a high unemployment rate; we’re looking at a water and sewer bill increase, storm water increase, CATS [Charlotte Area Transit System] fare increase, and of course the mother of all increases, which would be the county reval.
“Our citizens,” Pickering said, “need time to recover from the blows they’ve taken.”
Fallon, another at-large Democrat, echoed that sentiment.
“There are so many people out of work and on the edge,” she said. “I will not push anybody over the edge.”
Howard, the lone at-large Democrat to support the budget, didn’t have that problem. He rationalized that the city’s 8-percent tax hike would really be less than a 1-percent increase, when combined with the county’s recently approved 2.4-cent tax cut.
The owner of a $200,000 house would pay $72 more per year under the city tax hike, Howard said; but paired with the county tax cut, it would only be an increase of $23 per year. By conflating the city and county budgets, Howard argued that the city’s 8-percent tax hike would actually only be “a 0.93 percent increase, or about $2 more per month.”
Cooksey wasn’t buying the juggling act, noting that the main reason the county was able to provide a modicum of tax relief this year was because commissioners set the tax rate too high last year and, after the revaluation windfall, were raking in tens of millions of dollars more than anticipated. And the county wasn’t alone. In the wake of the reval, Cooksey said, the city is also collecting more revenue than projected.
The bottom line, Cooksey said: “We can talk about the bill last year and the bill this year. It doesn’t change the fact that there are people all over the city still suffering from a shock of a higher tax bill.”
Disgusting? “We’ve just become Washington, folks, and it’s frankly disgusting,” Foxx lamented after the council rejected the tax-hike budget he championed. “Right now this council is swinging in the wind and I don’t think this is the way to do business. If you’re going to vote on something, at least have a plan to say ‘yes’ to something. Right now there’s nothing.”
The D.C. comparison was appropriate, but again probably not in the way Foxx intended. Similar to the federal gridlock, a result of President Obama consistently criticizing Republicans for crafting a responsible spending plans while he has offered wholly unrealistic budgets that have been repeatedly rejected from both sides of the political aisle, Foxx refused to acknowledge that Republican councilmembers had, in fact, provided “a plan to say ‘yes’ to something.”
After the motion to approve the tax-hike budget failed, Cooksey proposed a spending plan that didn’t require a tax hike and would have funded capital improvements totaling $3.2 billion – to include $1.2 billion for transit projects; $1 billion for airport projects; $622 million for water and sewer projects and about $260 million for stormwater projects – instead of a $4.2 billion capital plan and its $926 million in projects that would have required a property tax hike.
“Nobody has said no capital improvement,” Cooksey reasoned. “The choice that was laid out was between one of $4.1 billion with a tax increase and $3.2 billion with no tax increase.”
Cooksey’s motion, though, didn’t gain any support from council Democrats and was left to wither on the vine.
Foxx and City Manager Curt Walton have argued a tax hike is needed to fund projects that would stimulate reinvestment in low-income neighborhoods and bolster property values there, reversing what Walton has called an “unsustainable” trend that leeches about half of the city’s property tax base from its northern and southern suburbs.
A majority of council balked, rightfully reasoning that now was not the time to hit residents with an 8-percent tax hike to help pay for extravagances like a $119 million streetcar, a $25 million facelift for Bojangles’ Coliseum, and $35 million for the planned Charlotte Multi-Use Trail, a bikeway path extending across Charlotte from Pineville to the Cabarrus County line.
“People right now, in this time, are going through a hardship,” Cannon said, explaining his vote against the tax-hike budget. “In as much as I’d like to be supportive of what’s before us in this (capital improvement plan), I can’t see imposing a greater hardship on those who can’t afford an increase on top of other city and county fees.”
Countered Foxx to councilmembers who rejected the tax-hike budget he championed: “You just tossed out the capital investment plan and, frankly, I think we are doing some real damage to projects we all have spent a lot of time on.”
While the council’s vote Tuesday night marked a surprising flash of fiscal sanity, councilmembers still have their work cut out in crafting a budget that can gain majority support before a looming June 30 deadline.
To that end, Foxx sent a clear message that he expects his Democrat cohorts to slip back into their taxing ways.
“I will not hesitate to veto a budget,” Foxx warned, “that I think falls short of the goals this city needs to have.”
In other words, grab your wallets, folks; this still could be a bumpy ride.
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