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GREENSBORO – Trying to save your pennies?

Consider yourself in good company.

City Council members have been contemplating a rare move in Greensboro’s political history: reducing the tax rate.

As a group, the council already asked the city manager to keep taxes flat this year. Now some are wondering if there is a way to cut taxes.

“The citizens in this type of economy need a break,” Councilman Jim Kee said.

“You have to look at what the people desire and what they need and the cost of what they want and need. It’s just a matter of what people are willing to give up.”

Figuring out how to get there – a process that will be spelled out over the next few months – will be the difficult part, council members said.

City Manager Rashad Young will meet with council members about the budget at the end of the month. Next year’s budget must be adopted by June 30.

A penny on the tax rate costs the average homeowner $20 a year, assuming you have a home worth $200,000. So if the city taxes get cut by 2 cents, you save about $3.33 a month – a savings that will afford you three Krispy Kreme donuts with a few pennies to spare.

On the city revenue side, a penny is worth approximately $2.2 million. For every 2 cents, there will have to be about $4.4 million in cuts to come out of the city’s $255 million general fund.

Except for times when the tax rates were readjusted after a countywide revaluation, the city has reduced taxes only once since the 1970s.

It was in 1998 – and it was a very different economy. The city was flush with revenue and found plenty of stuff to spend it on, including 33 new positions in the police department and a reduction in bus fares.

This year, the City Council already has to figure out how to close an $11.2 million budget deficit. A reduction in the tax rate would mean even more cuts, and council members want to be cautious and see what might need to be cut to accomplish a tax reduction.

“I’m all for a tax decrease,” Councilwoman Nancy Vaughan said. “Let’s decide how we are going to get there.”

Councilman Danny Thompson, who has advocated budget cuts up to four percent, has suggested reviewing the $96 million in bond projects proposed to start this year.

“I’m thinking instead of piling on a bunch of debt on the backs of the unemployed and those struggling to make ends meet….why not do a couple of prudent things and be good stewards,” Thompson said. “Why not give a little bit back?”

Some council members are concerned that tax cuts could put the city in a tough position to cover the basic needs of residents.

Councilman Zack Matheny said the city is suffering because of some prior cuts, such as eliminating the road resurfacing budget.

“You’ve got bonds the people voted on. You got infrastructure needs,” Matheny said. “We need to look at all of them.”

Contact Amanda Lehmet at 373-7075 or amanda.lehmert@news-record.com.