The Columbia City Council voted Friday afternoon to move all revenue from the occupational tax to the general fund and to eliminate allocations.
Council members discussed budget issues before voting to drop allocations during a special called meeting, with Dr. Ronald Rogers making the motion followed by a second from Linda Waggener.
Council members Mark Harris and Craig Lasley voted with Rogers and Waggener for the amendment while Charles Grimsley and Craig Dean voted no.
The city established the payroll tax at the end of last year and allocated portions to economic development, parks and recreation, sidewalks and infrastructure and the rainy day fund. Friday's vote is retroactive to Jan. 1, when the 1 percent tax started.
"Nobody on the council, nobody on the committee that came up with the percentages could have foreseen the amount of loss of revenue that has happened," said Rogers.
Mayor Curtis Hardwick said the city has been surviving for several years by cashing in CDs.
"We don't have enough CDs to balance it," Hardwick said.
It was unclear, however, how much of a deficit the city is facing for the current fiscal year. Mayor Hardwick said he requested a report from the auditor to compare revenues and expenses, which showed nearly a $200,000 deficit. Just prior to the meeting, however, it was pointed out that the report indicated it covered the fiscal year ending in 2014, not the current fiscal year that ends this month.
A budget amendment tabled by the council earlier this month showed a $38,000 deficit in the general fund.
That does not include $98,000 in insurance tax revenue the city will apparently have to return because it was paid in error.
In addition, Hardwick said the city is supposed to have $240,000 in road funds.
"We obligated $240,000 but we don't have $240,000," Hardwick said, apparently suggesting the city has dipped into money that should have been set aside for road projects.
The council also gave first reading to a budget for the upcoming fiscal year after voting to not include any pay raises in the budget.
Several council members complimented city employees and noted they have not have pay increases for several years. Rogers voted to develop the budget with no pay increases and Grimsley seconded. All council members voted yes.
While the council gave first reading to the budget, it was not released to the press because an error was discovered during the meeting. Grimsley noticed that a $200,000 carryover in the garbage fund from the previous year was not figured in the proposed budget. City Clerk Rhonda Loy is making the correction and will provide the proposed budget Monday.
The council will hold another special called meeting Monday at 5:30 p.m. to have second readings on a final amendment for the 2014-15 fiscal year budget and for the budget for the upcoming 2015-16 fiscal year.