The City Council has unanimously approved a $21 million budget that will leave the property tax rate unchanged but raise franchise taxes 0.8 percent, to 3.5 percent.
"We live in inflationary times," said Phil Goodrich, director of administrative services. "We feel this is a very responsible budget."The franchise tax increase will add about $24 annually to residents' utility bills. The $333,620 raised will pay for three additional public safety officers and provide cars for them, a fitness center adviser, an additional building inspector, add to the City Council's contingency fund and help fund the recreational center.
Resident Bob Wright opposed the franchise tax increase.
"It may not be a property tax, but it is still a tax. You can disguise it as a franchise tax, but it is still money we have to come up with."
Wright noted the 4.4 percent projected growth of revenue and suggested it might offset the need for the franchise tax increase. He also questioned the new hirings.
"As a taxpayer, I don't believe we need to be hiring three more safety officers or a building inspector," he said. "It seems unnecessary to me."
Wright also disagreed with the council's setting aside $482,000 for merit raises for some of the city's 330 full-time workers. The amount is 5.5 percent of their current pay. Goodrich said the funds would come from "other parts of the tax structure and would not be raised by the franchise tax."
"A 5.5 percent raise is too high," Wright said. "If we hold down salaries and benefits, we can keep taxes down."
Howard Stevenson of the Utah Taxpayers Association strongly opposed the pay increase and the franchise tax increase.
"The timing for any tax increase could not be worse. This type of tax increase, in light of a 5.5 percent pay increase, is unconscionable."
"That's what I thought until I started checking around," Councilwoman Joyce Johnson said. "It was hard to compare salaries because so many of our department heads were doing more than one job. If our people are really doing three jobs, we are underpaying them."
"If you look at inflation for the last 10 years and pay increases, we are really way behind where we should be," Councilman Paul Washburn said. "Our employees have been paying extra to the city - not only taxes, but the value of the pay increases we haven't given them."
Councilman Kelvin Clayton said Orem runs on less manpower than most other cities.
"It is not an across-the-board raise. The system was created to provide a reward for people taking extra responsibility."
Mayor Blaine Willes reminded residents that council members are not shielded from tax increases.
"We don't want to pay higher taxes either, but it is our responsibility to keep the numbers as low as possible and provide the necessary services."
Before approving the budget, council members deleted proposals to fund a new storm system, add an extra staff member to the Commission for Economic Development in Orem and increase fees for building permits.
> Increase in Orem franchise tax will pay for:
Three new public safety officers $130,620
Continued funding for Fitness Center consultant 15,000
One additional building inspector 33,000
Additional money for contingency fund 25,000
Additional money for recreational center 130,000