The Winston-Salem City Council voted to raise taxes by 3.4 percent on Monday night, passing a budget with significant spending cuts that is expected to result in the elimination of about a dozen professional and management jobs, delayed fleet and equipment replacement, less money for street maintenance and reductions in travel spending.

The tax increase equates to 1.6 cents per $100 of property evaluation, or $20 per year for a home valued at $125,000. The increase brings the city’s tax rate to $1.17 per $100 of property valuation, including county taxes. The rate still compares favorably to Winston-Salem’s urban neighbor, Greensboro, whose residents pay a combined city-county tax rate of $1.42.

The budget included no bus-fare increase, as originally proposed, and also put a planned Sunday bus-service extension on hold. While chopping $700,000 out of the budget, resulting in the loss of an estimated 10-12 professional and management jobs, the budget also included a pay adjustment of up to $250 for each city employee to offset the increased costs of healthcare.

That tradeoff cost the budget the votes of two members, Southeast Ward Councilman James Taylor Jr. and East Ward Councilman Derwin Montgomery, who defected from the six-member majority that approved the ordinance.

Taylor and Montgomery joined an unsuccessful effort by South Ward Councilwoman Molly Leight to amend the budget by restoring the $700,000 to preserve the jobs while cutting $1.1 million earmarked for bonuses.

Leight said those who wanted to avoid workforce reductions in city government largely remained silent through several public hearings on the budget.

“All we heard was cut, cut, cut,” she said, “which is what we did. We cut equipment replacement like computers, which means that when you e-mail or send something to city staff after this next year, they may not be able to open it because it will be incompatible if you’ve got a new computer. We cut Sunday [bus] service. We can do something about that in the future with community partners. We cut police-car replacements for the cars that are still running. If you call for a policeman and he doesn’t get there because his car breaks down, we cut it. We cut a police recruit class, so I don’t want to be hearing that we don’t have enough public safety. We cut paving roads and sidewalks. Hey, we’re going to have to live with the potholes.”

Leight’s proposed tradeoff came at the prompting of Glynis Jordan, a former city employee, who argued that city employment is a form of economic development.

“I’m asking you to keep the existing positions,” she told council during the public hearing before the budget vote. “Keep the buying power of 10 to 18 families alive in Forsyth County. Although I do agree with the city manager’s proposed tax increases I also believe there’s a way to save these positions. A $250 bonus per employee is being proposed, partly to help with the 12- to 18-percent increase in their healthcare costs. With regret, I suggest don’t do this. Yes, it’s harsh, especially for the yard workers, but keeping coworkers, friends or themselves employed is worth it.”

That sentiment prompted pushback from Irene May, a Northwest Ward resident.

“I feel for the lady who came up and talked about 10 to 14 people who are going to lose jobs, but in reality the city of Winston-Salem does not exist to provide people with jobs,” she said.

Southwest Ward Councilman Dan Besse led the defense of the original budget proposal, echoing sentiments by North Ward Councilwoman Denise D. Adams. Besse said he would not support a net pay increase for city employees in the current environment of depressed revenues, but argued that the $250 bonus would offset the decrease in take-home pay as a result of increased healthcare costs.

“Take a look at how many we’re talking about: 10 to 14 positions cut, $700,000,” he said. “We’re not talking about the folks who are out repairing potholes or collecting trash or are keeping us safe with police and fire departments. We’re talking about pretty high level staff.”

Northwest Ward Councilwoman Wanda Merschel, who chairs the council’s finance committee, said the staff cuts were heartbreaking.

“This is a very difficult year,” she said.

“Some of the changes that the head of our budget and evaluation department listed are what are known as ‘hard costs’ — costs that are reductions in real dollars. I think there is no harder cost that is included in this budget than a reduction in force. However, we are in a new economy, and we as council members must be responsible for having the ability to provide core services to this community. Fire, police, sanitation – those are critical to the wellbeing of our community while workloads and other areas through no fault of their own have decreased to the point where there may be, in fact, an imbalance in staffing.”

City Manager Lee Garrity had recommended a 8.9-percent tax increase, but council identified $5.4 million in cost savings to whittle the tax hike down to 1.6 percent. Garrity has said the tax increase was necessary because of rising costs in pensions, healthcare, fuel and electricity. Moreover, federal stimulus funding to pay police salaries has run out and the state of North Carolina is no longer reimbursing cities for the loss of inventory taxes. To make matters worse, the revaluation of property next year is expected to further reduce revenues.

Taylor said he voted against the budget because his constituents in the Southeast Ward told him they were opposed in any reduction in services, and he saw the reduction in force as indirectly decreasing services. Overall, he said he approves of the direction council took.

“I thought it was a good budget,” he said after the meeting. “We didn’t have any fare increases. We cut spending as much as possible.”

Montgomery helped shape the budget by persuading his colleagues to reduce the bonus from up to $500 to no more than $250. But he said ultimately even $250 was too much.

“After hearing from different individuals who work for the city say, ‘We’re willing to give that up if it means keeping city staff,’” he said, “that made sense to me.”

In wide-ranging comments from the dais, Mayor Pro Tem Vivian Burke, who represents the Northeast Ward, indicated she holds little sympathy for city employees, considering that 47 percent of them live outside of the city and do not contribute to the tax base. She said senior citizens, many of whom can’t afford public transportation, have carried the burden of supporting city services with their tax dollars.

Responding to perceived criticism about compensation of council members Burke prodded Garrity to report that they receive a salary of $9,840, not counting a $2,700 expense line.

Burke, who chairs the council’s public safety committee, also suggested she was less than thrilled that the police department had hired someone to work directly with the black community. Responding to Burke, Garrity said he and police Chief Scott Cunningham had heard concerns “about the police department’s interactions with the minority community.” He said among the changes they proposed was to “take an existing position in the police department and reclassify it as a community relations specialist so there was somebody working directly for the chief who was reaching out to the minority community to build trust.

“Trust is a big problem for us in the police department,” he added.

During the budget discussions, council members identified a number of areas for study and evaluation, including holding nonprofits that receive city funding accountable for the number of minorities they employ — a concern for Burke — developing a “public transit strategic plan” at Montgomery’s request, and reviewing police retirement and employee healthcare plans.

“Mr. City Manager, you will be coming back to us this fall with a revised city retirement policy,” West Ward Councilman Robert Clark said. “Every other police department in the state has a different policy, and we’re looking at doing something different. I’m not sure what. We’re waiting for the report to come back.”