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City recommends budget with no tax increase, Council votes Monday

Posted at 6:14 pm June 3, 2014
By John Huotari 25 Comments

Oak Ridge City Council

The Oak Ridge City Council is pictured above during an August 2013 meeting. (File photo)

Note: This story was updated at 7:40 p.m. June 4.

Oak Ridge City Manager Mark Watson on Monday recommended a budget that does not raise the property tax rate, setting up a potential conflict with school officials, who have requested a 37-cent tax increase to avoid cuts.

The Oak Ridge Board of Education already approved its budget in in two meetings last week. That budget, which was scaled back from an earlier proposal, could include an extra $3.3 million to start implementing a technology initiative known as 1:1 that would provide electronic learning devices to all students over three years, add five technology positions, and give 2 percent pay raises to staff.

But the budget is still subject to the amount appropriated to the schools by the city. Oak Ridge provides a little less than one-third of the school system’s funding.

While the schools have approved a budget for the fiscal year that starts July 1, the city has not. The Oak Ridge City Council will consider the municipal budget in two separate meetings this month, one on June 9 and the second on June 16. The city budget also includes a 2 percent pay raise for employees.

It’s not clear that Oak Ridge City Council members will agree to raise taxes to accommodate the school system’s request. In his budget presentation to Council on Monday, Oak Ridge City Manager Mark Watson said Council members have endorsed keeping the tax rate unchanged for the seventh year in a row.

The tax rate is currently $2.39 per $100 of assessed value. The school’s proposal would raise it to $2.76 per $100 of assessed value. That could cost the owner of a $100,000 home another $7.62 per month, and the owner of a $200,000 home would pay another $15.25 each month.

The school’s budget request could be complicated by several factors, including the possible leasing of the 1:1 devices, which might reduce the initial upfront cost, and potential donations by the Oak Ridge Public Schools Education Foundation.

In his presentation to Council on Monday, Oak Ridge Schools Superintendent Bruce Borchers—who has emphasized a focus on STEM (science, technology, engineering, and mathematics)—said the devices are necessary so students can access technology easily and adeptly at school and at home. America is only graduating one-fifth of the STEM workforce needed, said Borchers, who briefly summarized 1:1 initiatives under way in other nearby school districts, including in Maryville and Blount County.

“This is too great of a town, too great of story to let us go backwards,” Borchers said. “I don’t want to be a part of going backwards. I think our kids deserve this. I think we can be a leader in the country, and that’s the type of budget I propose tonight for you.”

In his presentation, Watson said the school board has a strong desire to maintain an innovative and creative school system that attracts new residents and retains current ones, but the school system’s budget request will require a major tax increase to retain all services. He said city officials have to be concerned about permanently maintaining that level of funding in later years.

Watson said changes in the city budget include a roughly 4.8 percent increase in sales tax revenues, with most of the increase in the Anderson County portion of the city. No new staffing is proposed, but the budget does include a 2 percent pay adjustment starting July 1 and recommends continuing the increases for the next two years as well. Watson said employees have not had raises in several years.

The municipal budget would keep $175,000 in funding for activities related to the Oak Ridge Chamber of Commerce, continue private economic development consulting contracts with Ray Evans and Steve Jones, and reduce funding to the Oak Ridge Convention and Visitors Bureau by $25,000, dropping it to $275,000, according to a June 2 letter from Watson.

Watson said overall revenues have only slightly increased.

With full funding from the city, the school’s budget in all funds would be $62.8 million. The school’s transfer from the city would be $17.9 million. The city has been providing a little less than one-third of the school system’s funding each year.

Meanwhile, the city’s budget in all funds, including schools, would be $182.8 million. The general fund would be $20.5 million. The largest fund is the Electric Fund at $53.2 million.

The Monday, June 9, City Council meeting starts at 7 p.m. in the Oak Ridge Municipal Building Courtroom. The meeting will include a public hearing.

See the June 9 agenda, which includes Watson’s letter to City Council, here.

Watch the June 2 City Council meeting here.

See Borcher’s budget presentation to Council here: Oak Ridge Schools FY15 Proposed Budget.

Filed Under: Education, Government, Government, K-12, Oak Ridge, Slider, Top Stories Tagged With: 1:1, 1:1 devices, Anderson County, Bruce Borchers, budget, city budget, electronic learning devices, engineering, Mark Watson, mathematics, municipal workers, Oak Ridge Board of Education, Oak Ridge Chamber of Commerce, Oak Ridge City Council, Oak Ridge Convention and Visitors Bureau, Oak Ridge Public Schools Education Foundation, Oak Ridge Schools, pay raises, property tax rate, Ray Evans, sales tax revenues, school board, school budget, school staff, science, STEM, Steve Jones, tax increase, tech initiative, technology, technology initiative

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