City tentatively adopts higher tax rate

At a special meeting held yesterday July 28, city commissioners tentatively adopted the maximum property tax rate that they could levy under state law.

A change in law that went into effect last year gives the state the authority to set the maximum millage cities and counties can impose.

Typically, local governments will set the millage rate at the maximum, in doing so they can later lower the rate. However, state law prohibits a millage increase once initially set.

Facing a $34.5 million dollar decline in property values, commissioners cautiously set the millage rate for FY 2009-2010 at the maximum 7.54 rate allowed by law, which represents a 27 percent increase over last year’s rate of 5.96.

However, due to the decline in property values, the maximum rate will only generate $69,842 more in tax proceeds for the city.

Last year’s certified gross taxable property values were at $209,729,762 with an approved millage rate of 5.96, generated $1,251,377 in tax revenues that funded the city's operations.

This year’s certified values declined significantly to $175,228,003, if the tentatively adopted maximum rate of 7.54 mills stands, the city would generate approximately $1,321,219 to run local government.

However, to keep last year’s rate of 5.96 mills, the city would have to cut spending by $207,018.

If city officials decide to keep the maximum rate, they are at least encouraged that most property owners will actually pay lower taxes due to the drop in property values.

However, before taking a vote on setting a final rate, the city will host a series of budget workshops to look at the possibility of lowering the rate.