Manager’s initial tax estimates holding

May. 13, 2014 @ 07:03 PM

Briefing papers already circulated to elected officials indicate that City Manager Tom Bonfield will formally ask them next week to raise the city’s tax rate by 1.29 cents per $100 of assessed value.

That’s in line with early projections for the fiscal 20014-15 budget, and would leave it to the City Council to decide how to handle two issues that could tack another 1.07 cents per $100 on to the rate.

A majority of the council has signaled interest in repealing the city’s year-old, $1.80-a-month fee for residential trash collection and making up the revenue loss from the tax base.

Members have also debated a possible spending increase for parks maintenance.

The manager’s budget request won’t include either proposal, on the grounds the choice on each is ultimately one for the council to make.

“The solid waste thing is a policy decision up to the majority of the council as to how they want to pay for the service,” Bonfield said. “It doesn’t affect the budget.”

Similarly, while city staffers will explain how they’d spend the revenue from about half a cent’s addition to the tax rate for parks upkeep, “the council will ultimately have to decide what of that they think is worth doing,” he said.

For property owners, the rate increase the manager will ask for translates into about a 2.3-percent higher city tax burden. The owner of a $150,000 house would pay $19.35 more a year.

Inflation at last check was running at about 1.5 percent, according to the U.S. Bureau of Labor Statistics.

But the growth of the city’s tax rate over time has closely tracked the inflation rate.

Should the council opt to raise taxes only by the amount in Bonfield’s request, the annual increase in the city tax burden will have averaged 1.2 percent since fiscal 2008-09. Inflation has averaged 1.3 percent a year over the same period.

A little more than half of the suggested increase for fiscal 2014-15 – 0.73 cents per $100, to be exact – would cover rising debt-service payments.

The rest would cover the cost of retaining 16 police officers and 15 firefighters the city has been using federal grants to pay. The grants are expiring.

Should it follow through on the idea of eliminating the $1.80-a-month trash collection fee, the council would have to make up for the loss of about $1.4 million in annual revenue. That translates into the revenue from another 0.57 cents on the tax rate.

Four council members – Diane Catotti, Eddie Davis, Don Moffitt and Steve Schewel – have signaled interest in repealing the fee. A key city political group, the People’s Alliance, argues the fee is regressive, burdening lower- and middle-income households more than the equivalent in property taxes would.

The parks-upkeep issue has provoked extensive council debate, with members to date having reached no real consensus on what to do.

Discussion began over the winter when administrators, borrowing an idea already in place for housing programs, floated the idea of a “penny for parks” annual earmark of the revenue generated by 1 cent on the tax rate.

Some members, Catotti most notably, signaled they’d consider no more than a half-cent earmark. But the council elected to keep its options open going into the budget talks that begin later this month.

Assuming no offsetting cuts elsewhere in the budget, the potential parks and solid-waste tax add-ons would require about a 4.2 percent increase in the tax burden.

That would push the average annual tax-burden increase since fiscal 2008-09 to about 1.5 percent – over the average inflation rate, but likely still under the inflation-plus-population-growth benchmark anti-tax activists use to judge state- and local-government fiscal management.