Oak Ridge Today

Council considers budget with no tax increase, less money for Chamber, ORCVB

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Mark Watson

Mark Watson

The Oak Ridge City Council on Monday will consider a budget that does not raise property taxes but could cut funding for the Chamber of Commerce as well as the Convention and Visitors Bureau.

It would include contracts with economic development consultants Ray Evans and Steve Jones and a 1 percent cost-of-living pay raise for city employees.

Under the budget proposed by Oak Ridge City Manager Mark Watson, the property tax rate would stay at $2.39 per $100 of assessed value. [Read more…]

Guest column: Strategizing a path to prosperity

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Trina Baughn

Trina Baughn

The problem

This month, the Oak Ridge City Council will establish your property tax rate for 2014 via the approval of our annual city budget. And though it appears that taxes will remain flat, our excessive spending levels are unsustainable and continue to hinder our ability to compete with surrounding communities.

In spite of all the new developments happening as of late, if council approves the budget as proposed, residents and businesses will continue to feel the financial crunch for quite some time. Not only will we retain one of the highest property tax rates in the state, but we’ll also retain one of the largest per capita debt levels in the region. (At nearly $7,000 per person, we have more than four times that of Knox County residents and more than seven times that of Knoxville residents). A dozen more chicken places and grocery store relocations won’t make a dent in the average Oak Ridger’s bills.

If we are to make any kind of progress, we need a strategy that aims to increase revenue while reducing expenditures. This column will focus on increasing our revenue base. I will address budgetary inefficiencies and waste in a follow-up piece next week. [Read more…]

Guest column: The velocity of money is 70 mph

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By Pat Fain and Leslie Agron

The usual theory behind economic development for a community is that the local economy is too small. So, economic development experts seek to bring in new companies, especially industrial ones, to enhance that economy. The theory is that increased local purchases by new companies and their employees are multiplied several times as the money spreads throughout the community. Every additional purchase results in additional sales tax from the same original dollar that exited the new company. Companies that manufacture goods or provide services externally have the greatest value theoretically as they actually bring new money into the community. The rate at which this happens is called the velocity of money.

In Oak Ridge, however, the size of the economy that occurs within our city limits is enormous for our population. The problem for Oak Ridge is that much of that economy occurs within non-taxable institutions and the vast majority of their staff does not live in Oak Ridge. Thus, in Oak Ridge the velocity of money is 70 mph—the speed at which those folks are cruising down Interstate 40 on Friday evening as they take their paychecks home!

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Guest column: Changing the economic development game in Oak Ridge

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There’s no nice way to spin it: The results of our city’s bad decisions for the past decade are catching up with us.

In addition to having high debt and property taxes, our sales tax revenues continue to decline, we are exporting more than $727 million per year in U.S. Department of Energy payroll (1), and we have a comparatively stagnant population growth. Even with all the new restaurants opening, these projects won’t fully replace the revenue we’ve lost from the countless businesses that have closed up shop or left town for greener pastures.

Continuing down this path is not an option. Thankfully, our city manager understands this and wants to strategize a more competitive position for Oak Ridge. He is proposing that we change our approach to economic development (2) by finding other uses for the $1-2 million we’ve been spending annually on nearly 20 different external organizations like the Oak Ridge Chamber of Commerce.

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