LEBANON — A group of residents is trying to increase oversight of the city’s finances.
A petition has been circulated that calls for the establishment of a finance advisory committee to offer guidance to the City Council on spending and ensure municipal budgets meet the “needs of the City based on current and anticipated resources.”
The petition’s proponents have argued the city must bring down costs or risk taxing residents out of their homes. Its backers were some of the most vocal critics during an unusually contentious municipal budget process last year.
The City Council will hold a public hearing on the petition at 6 p.m. Thursday at City Hall.
Council members could opt to pass the petition as written on Thursday. Or more likely, the council will take no action, which would mean the decision whether to create the financial advisory committee would go before voters in March.
In spring 2024, a projection of double-digit tax rate increases for the next several years by then-City Manager Shaun Mulholland “woke the bear,” said Lori Key, who helped bring together a “coalition” of city residents who brought the petition forward.
Last fall, facing a nearly 12% tax rate increase to the municipal portion of the property tax rate, the City Council ultimately cut $966,000 from the budget, including eliminating unfilled jobs and money for paving and infrastructure improvements.
The council also approved a $300,000 transfer from the downtown tax incremental finance district fund to offset the tax rate.
After the budget was set, Key said, she and other residents started conversations with members of the City Council about how to give residents more oversight in the budget process.
After months of what they considered to be little progress, the group members started working on the petition this fall, Key said. They needed to collect 818 signatures, or 10% of the total votes cast in the most recent gubernatorial election.
City Clerk Jaseya Ewing verified 822 signatures, which Key said the group secured without “any problem” and with time to spare.
“I think people are really concerned right now, especially with the effects of the reappraisal,” Key said.
Property taxes went up for most property owners this fall, following a citywide reappraisal of properties completed earlier this year. Single-family homes saw a 37% average increase in assessed value, which more than offset the 18.1% decrease in the city’s overall property tax rate.
After the reappraisal results and December tax bills came out, there was fear and desperation from city residents, Key said.
If approved, the new committee would include three members of the City Council and four residents at-large. Its guidance would be “purely advisory” with “none of the duties or authority of an official budget committee,” according to meeting materials. The legal responsibility for adopting a budget would still fall solely to the City Council
“I think a finance committee would help the councilors,” said Key, who ran an unsuccessful campaign for City Council last spring and has not yet decided if she will run again. “If I was on the council, I would want the help of a finance committee to do some of this legwork.”
City Manager Andrew Hosmer’s proposed budget for 2026 is expected to result in a 3.7% increase to the property tax rate.
While Key said it would be “fair to say that there was a push” from city officials to reduce taxes this year, she still described the budget increase as untenable. She said the city should use more unassigned funds to offset the tax rate and cut down more on capital projects to get closer to a level budget.
A second petition brought by the same group of residents is in the works. It would update Lebanon’s City Charter to impose a cap on annual tax rate increases that is not more than the three-year average consumer price index.
As of last week, the petition was eight verified signatures short of the threshold, Key said, but the group still had forms with collected signatures to turn into the city clerk. She is “confident” the group has secured sufficient signatures.
The City Council is expected to discuss the tax cap petition Thursday and set a public hearing for Jan. 7. The question is likely to end up on the March ballot as well.