Saturday, September 09, 2006

Budget Talks Begin Soon

The administration has presented the City Council with a $65.5 million budget for the fiscal year that began July 1.

Of that amount, $43 million is to be raised from local property taxes, with the balance coming from various forms of aid and grants. According to city officials, the proposed budget reflects an 8.22 percent tax increase, or $305.10 on an average $113,000 home. To offset the increase, the city has asked for $2.9 million in state aid.

The tax rate per $100 of assessed valuation would increase from $3.099 to $3.370 under the proposed budget. The council will now begin budget deliberations and the final budget may be lower.

At the Sept. 5 City Council meeting, Chief Financial Officer Peter Sepelya said the increase was largely due to a $1.7 million increase in salary and wage costs, another $1 million each in pensions and health benefits and $430,000 in debt service.

On the other hand, revenues had shortfalls of $500,000 in sales of municipal assets, $66,000 in code enforcement charges and $143,000 in court fines, he said.

Police and fire costs – the city’s main expenditure - went up from $20,570,267 in FY 2006 to $22,225,674 in FY 2007.

The City Council set a schedule for budget meetings that was supposed to start July 11, but so far no meetings have been held.

Last year, the council began meeting in July to discuss the budget. But in late fall, the council decided to put off budget decisions until the incoming administration of Mayor Sharon Robinson-Briggs was able to give input. The council passed the budget at the end of January 2006.

In July, the City Council had to set a temporary tax rate by state mandate. The rate was $3.188 per $100 of assessed valuation, a 2.87 increase over the past year’s tax levy and a 5.66 increase over the first and second quarter tax assessment for FY 2006. So taxpayers will now owe only a portion of the proposed increase, because they have already paid $101.70 per $100 toward the increase. February and May tax bills will reflect only a $203.40 increase on the average $113,000 house, if the proposed budget stands.

These budget stories are notoriously hard to report. There is the discrepancy of the calendar year versus the fiscal year plus the various iterations of the budget during council talks. Plaintalker will try to follow the action and report on the results.

--Bernice Paglia


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