Dalton set to trim tax rate 3.3 percent

Dalton leaders on Tuesday will vote to cut city revenue by about $250,000.

The city has money to spare after making painful cuts three years ago and also because the city underestimated its tax revenue for the 2009 fiscal year, said Mayor David Pennington.

Overall, the city will reduce its millage rate by 3.3 percent and will take in 9 percent less revenue.

“We were taxing too much when I became mayor,” said Pennington, who took office in 2008. “I campaigned on a promise to cut the tax rate.”

And the city has made good on the promise three years in a row, he said. The current reduction follows millage rate cuts in 2009 and 2008, the mayor said.

At first glance, however, the city’s millage rate appears to be 0.001 mills higher than in 2009, but that’s due to a state law change in bookkeeping that Dalton is a year late in implementing, Pennington said.

The change says Dalton must add its debt service obligations — what it pays for the bonds it has issued — into its millage rate, which formerly was split into debt service and general obligations.

In 2009, when the bookkeeping change was supposed to go into effect, the millage rate would have been 2.974, the mayor said. The 2010 millage rate is 2.875 mills with the debt service included.

The city is running with about 20 percent fewer employees than three years ago, he said, and has been very conservative in spending. The mayor insists, though, that Dalton is delivering the same level of services except for scaling back trash collection to one day a week.

“I haven’t seen a city or a county with a revenue problem,” Pennington said. “They have spending problems.”

Making the previous cuts came at just the right time, roughly a year before the housing market hit bottom and, consequently, led to carpet industry cuts in Dalton.

“I really give due credit to the council who, before I came on board, peeked around the corner and made a conservative prediction on the local economy,” said Ross.

Still, shuffling some employees to different jobs and laying others off were hard choices, he said.

“But you can look around to different businesses everywhere and everyone is having to make do with less,” Ross said.

On top of being frugal, Dalton also has a strong tax base, propped up by a large manufacturing sector with taxable inventories and equipment.

Even though home values in Dalton have fallen markedly over the last three years, carpeting hasn’t disappeared completely and still forms the city’s manufacturing base.

“Our floor is much higher than [that of] many cities,” Pennington said. “When in Atlanta, for example, the economy slowed and their home values fell and retail fell off, they didn’t have anything else. Their bottom is limitless.”

Pennington already has indicated that he would like to cut another 10 percent from the budget next year. Ross said his staff has already started looking for ways to save money.

“The mayor and council have made it known that this isn’t our money,” Ross said. “We are simply holding onto it for a while.”

City leaders must vote on the current tax rate twice before it becomes law.