METHUEN — Joann Thompson could barely reach the microphone, but her message to city councilors still came through loud and clear last night.
"I have to live on $1,500 a month and I just can't afford another tax increase," the elderly woman, who stands just about 5 feet tall, said.
After hearing from Thompson and others who attended last night's special meeting, the City Council cut $746,000 from the city budget to lessen property tax hikes.
Councilor Larry Giordano had called on residents to show up for a "tea party," and roughly 100 people crammed into the Great Hall in City Hall for the three-hour meeting about taxes. While there wasn't much tea — only four Market Basket brand tea bags were left in a basket on the table behind Mayor William Manzi's seat — people had plenty to say.
Union leaders said they don't want to pay more either, but they warned that not setting a tax rate could lead to layoffs and violations of labor agreements in which workers took pay cuts.
"We had city employees take a 10 percent pay cut, which is far more than anybody's taxes are going to go up," said Vinnie Graziano, president of the American Federation of State, County and Municipal Employees local, which represents workers in many city departments.
Councilors voted 6-3 to cut the budget by $746,000 and increase residential taxes on average by $87 and commercial taxes by $181.
That's cheaper than the increase councilors voted in favor of on Dec. 7, which would have caused average tax increases of $88 for residents and $609 for businesses.
The state Department of Revenue rejected the rates that were approved Dec. 7, saying they would place too much burden on businesses. That left city officials with two options: decrease the tax burden on businesses by increasing it on residents or cut the budget. A majority of councilors opted for the latter last night, despite a recommendation from Mayor William to do the former.
Manzi had asked councilors to approve a shift in the ratio between businesses and residential properties. That adjustment would have increased the amount that residents pay by $128, on average, over what they paid last year, while the increase for businesses would have dropped from $609 to $287.
In order to bring the residential tax increase back to $88, the city needed to cut $746,000 from the budget, according to Manzi.
By working with councilors and the School Committee, Manzi came up with a $200,000 cut in school transportation costs because the bus company, Trombly, agreed to reduce its fee. The city also received $50,000 from the federal government as a reimbursement for money the city spent during last year's ice storm.
Meadowbrook Road resident David Copley said it was amazing how the city found $250,000.
"What took so long to find that in the first place? Now imagine what would happen if you actually looked," he said.
Councilor Stephen Zanni said he went through the budget and looked for cuts and met with Manzi.
To come up with the rest of the budget cuts needed to meet the $746,000 target, Councilor Joseph Leone suggested reducing the amount the city has to pay for employee pensions by $496,000. Leone noted that the city will still be obligated to pay the money, but it won't have to pay it until the fiscal year ends on June 30 — giving officials six months to figure out from where else to cut to come up with the $496,000.
Councilors voted 5-4 in favor of Leone's motion.
"There's going to be no money to pay it in June either," said Councilor John Cronin Jr.
City Solicitor Peter McQuillan said the city would be opening itself up to a lawsuit.
People at the meeting pitted city workers against residents.
"People who work for the city are not better or worse than the taxpayers," said Canobieola Road resident Jack Burke. "I cannot find work. I have bills to pay. My head is just above water. They can take a layoff the same as the rest."
In an attempt to illustrate wasteful spending, Councilor Jeanne Pappalardo asked why the city spent $5,000 for a private attorney to work on the union agreements that led to the 10 percent pay cuts. Manzi said it was because City Solicitor Peter McQuillan was away at the time. Pappalardo shook her head. McQuillan declined to comment after the meeting.
Both Pappalardo and Councilor Philip Lahey Jr. said they were told the budget they approved in June would not increase taxes, which turned out to be false.
"We were all sold a bill of goods," Lahey said.
How councilors voted
On the new tax factor
Joseph Leone: Yes
Jeanne Pappalardo: No
Kenneth Willette Jr.: Yes
Stephen Zanni: No
John Cronin Jr.: Yes
Larry Giordano: No
Jennifer Kannan: Yes
Philip Lahey Jr.: Yes
Deborah Quinn: Yes
On the motion to cut pension funding
Joseph Leone: Yes
Jeanne Pappalardo: No
Kenneth Willette Jr.: Yes
Stephen Zanni: No
John Cronin Jr.: No
Larry Giordano: No
Jennifer Kannan: Yes
Philip Lahey Jr.: Yes
Deborah Quinn: Yes
