Bonita Springs’ property tax rate can not go any higher than last year’s rate.
City Council agreed Thursday 7-0 to set the maximum possible millage at 82.73 cents for every $1,000 of value, the same rate it has been for the past two years. They made decision despite a more than $1 million shortfall in revenues.
The tax rate will be set in September, however, one member was concerned that agreeing not to increase the tax rate could hamstring the city before the final budget numbers are in place.
“I would like to see us start at a higher number … the rollback rate,” Councilwoman Martha Simons said. “We can start screwing that down in the budget process.”
A rollback rate is a tax rate at which the city would bring in the same revenue as the year before.
Keeping the tax rate the same or lowering it will mean at least a $920,000 revenue decrease from last year.
Homeowners who are not homesteaded with a taxable value of $250,000 will see their taxes drop by about 13.3 percent, or $28.
But homesteaded homeowners with a $250,000 home whose market value has not fallen below the taxable value will see a 2.7 percent increase, or $5.58.
The increase is called recapture and it is meant to make up for when property values were skyrocketing in double digits, but homesteaded properties were capped at 3 percent.
Property taxes make up about a third of the city’s revenue and 42 percent of the city’s operating budget. Home values continue to fall from 2007 highs of $11.2 billion.
Properties shed 13 percent of their value this year to $7.3 billion from $8.4 billion.
The city’s revenues are expected to slip 9.2 percent, or $1.7 million, to $17.2 million next year.
Expenses are expected to grow by 3.9 percent, or about $851,000, to $22.8 million.
Some of those increases include two new positions, a community relations coordinator and a maintenance position, and $125,000 for five new vehicles for the city’s Lee County Sheriff’s Office deputies.
“We’ve had a reduction in revenue but an increase in expenses, which is not a good policy to have that kind of discrepancy,” said Councilman Bill Lonkart. “It should be the other way around.”
For the first time in the city’s history, the city will not have enough money in its operating budget because property taxes have taken such a hit, said Finance Director Lisa Griggs Roberson.
The city’s $14.8 million general fund will be about $1 million short, requiring the city to transfer money from elsewhere.
The city will be able to balance its budget because it will be starting next year with a $13 million surplus, about $5 million of which cannot be touched as the city has a policy to set aside several months of operating expenses in a sort of savings account.
The surplus came from a state refund in overcharged communication services taxes as well as savings from the Old 41 Road project.
“We don’t expect to be able to generate this kind of excess again,” Griggs Roberson said. “We will be utilizing part of that money to operate over the next few years.”
She has projected the city will be likely to remain in a deficit for the next five years.
Councilman Steve McIntosh proposed looking at raising the city’s communication tax rate, which the lowest of all municipalities in Lee and Collier counties at 1.8 percent.
Other cities range from 3.3 percent in Naples to 5.22 percent for Marco Island, Fort Myers and Fort Myers Beach.
The city considered, and then rejected the notion, last year.
Councilman John Spear proposed analyzing that tax six months before the budget cycle so that it could tie in to a plan to lower ad valorem taxes.
The discussion could come back when the city approves its budget in September.
Spear said he was concerned that while the city sets a millage rate cap, current projects whose price tags are not yet determined could take a hit.
The city is currently forging a new brand for itself and projects to spur its economy.
Griggs Roberson said each year the budget allocates money for such programs. This year that contingency fund holds $420,000.
The final budget and millage rate will be approved at a meeting set for 10 a.m. Sept. 11.
Connect with Tara E. McLaughlin at www.naplesnews.com/staff/tara-mclaughlin/
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