Wednesday, June 14, 2006

Tax Hike Drops to Thirty-Five Percent

Here's the good news:

Earlier this week, Cathy Jensen, City Budget Officer, received this year's certified tax rate from the County.

The certified tax rate, as you may recall from a previous post, is the multiplier applied to the tax rate to make sure revenue to the city does not rise with inflation. (Why Truth in Taxation felt it so important that cities' spending power should decrease each year is a question I cannot help you with.)

However, the law DOES allow cities to keep additional revenues if they come from new growth (new houses, businesses, shopping centers, etc.).

Which brings me to the good news. Growth last year turns out to have been higher than projected, resulting in more revenue to the City -- revenue the City is allowed to keep.

Therefore, to raise the $1,027,000 needed to balance the budget, property tax revenues need only rise thirty-five percent over last year.

Thirty-five percent is still an increase, so I'm not putting on my party hat -- but I think I can speak for the Council when I say we're greatly relieved to have backed down from the fifty-percent figure.

[That increase shows up as a fifty-one percent rise above the certified tax rate -- but it's important to remember that the certified tax rate is an artificial benchmark.]


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