No Tax Increase in Easley Budget

Easley's Fiscal Year 2013-2014 budget contains no tax increase.

City Administrator Fox Simons held a budget workshop before the first reading of the $16 million budget last month.

“There's no tax increase included in the budget, it remains at 58 mills,” Simons said. “There's no increase in business license fees or permits.”

The general fund budget is $12 million.

The budget also does not draw from the city's fund balance.

The proposed budget represents a 1 percent increase over the current year's budget.

The city has a very “diversified revenue stream, which is a good thing,” Simons said.

“We're not relying on one source too much,” he said. “You don't want to put all your eggs in one basket. The state they have all their eggs in the sales tax, so when things go bad, they really go bad.”

But the city still has challenges. The city continues to absorb cuts to State Aid to Subdivision.

“Since 2008, we've absorbed a just over $200,000 reduction,” Simons said.

Just before the budget workshop, the amount of state funding to counties was reduced again, he said.

The last time Easley saw this level of state funding was fiscal year 1999, Simons said.

Easley remains a donor city, he said.

“The City of Easley is sending more money to Columbia than we're receiving and it's getting larger and larger every year,” Simons said. “It's really quite frustrating.”

One revenue source is the 1.65 percent franchise fee levied on Easley Combined Utilities earlier this year.

The city has the right to levy a 5 percent franchise fee and had been charging a 3.6 percent franchise fee.

Simons said he estimates the increase will generate an additional $500,000 in revenue for the city.

“If we didn't have that, we'd be having a totally different conversation right now,” Simons said. “We'd be talking about folks leaving the organization through layoffs, RIFS (reductions in force) and that sort of thing. We don't have to have that conversation this year.”

The budget also reflects a financial puzzle, Simons said.

“We've got a phenomenon that I can't explain and the auditor can't explain,” he said. “The assessed value of the City of Easley is increasing at an average, good clip, yet our tax growth is staying the same or slightly going down. That shouldn't be the case, but it is. I'm not sure how to go about finding this answers out, but I'm going to keep on trying.

“Assessed value is what your taxes are based on, so if assessed value goes up, logic tells you that tax revenue should be going up as well,” Simons continued.

Fluctuations in demand and the price for natural gas has caused the city to see decreases in its franchise fee revenue from Fort Hill Natural Gas.

“It has nothing to do with Fort Hill,” Simons said. “It's the nature of the economy and the price of natural gas. It's a simple supply and demand issue. There's a whole lot of supply and not enough demand.”

But the city did see an increase from that fee in the last quarter, he said.

“I think that's the first time that's happened in about three years, where we've had quarter over quarter growth,” Simons said. “Hopefully, that's a sign of better things to come.”

Building permits and business licenses revenue are on the rise, Simons said.

“With Sam's, Academy, Marshalls, Longhorn, we're seeing an uptick in that,” he said.

The budget calls for only one new position – an additional business license inspector.

“We feel that a city of our size having just one person doing it just wasn't efficient,” Simons said.

Second reading of the budget is slated for the June 10 City Council meeting.