homepage logo

Council to tackle tax rate Monday

By Staff | Aug 1, 2009

A budget process most Cape Coral City Councilmembers have said is the most difficult they have ever been involved in will take a large step Monday when council members set the tentative millage rate.
City Manager Terry Stewart suggested a millage rate of 7.776, or approximately $7.78 per $1,000 in taxable assessed property, in his budget proposal, which meets the council’s target operating budget of $116.4 million. The target operating budget is $13.5 million less than this year’s budget.
If enacted, the proposed rate would represent a 63 percent increase on the current millage rate of 4.769.
Because council can only lower the tentative millage rate once it is set, some council members are leaning towards accepting the proposed rate, at least for Monday.
“I’m going to be relatively conservative in terms of setting that rate,” said Mayor Jim Burch, adding that he will lean towards the higher rate, then working it down.
Councilmember Bill Deile disagrees with that reasoning, and said the millage rate should be set lower and the council should make city spending fit those revenues.
He favors a millage rate no larger than the rolled back rate, or the millage rate needed to recover the same amount of revenue as the previous year. The rolled back rate currently stands at 7.206, and would generate an estimated $78.7 million in property taxes.
“I wouldn’t look favorably on anything that resulted in a tax increase,” Deile said.
To maintain current service levels, some increase in the millage rate is needed due to a 34 percent drop in property values, officials said.
In the coming fiscal year, there is $10.5 billion in total taxable assessed value in the Cape, compared to $15.7 billion this year.
Major cuts are already part of the proposed budget, with no funding for special events or over 50 softball leagues in the Parks and Recreation Department budget, despite a proposed $40 per player user fee for athletics.
In the face of drastic cuts, council members are hesitant to identify additional areas to trim from the budget.
“I don’t know what other cuts we can make without shutting the city down,” Councilmember Dolores Bertolini said.
Yet others are still holding out hope for further cuts.
“I’m looking for some concessions from the unions going forward,” Deile said.
Deile said other budget slashing ideas could be forth coming, but wants to wait until the Financial Advisory Committee finishes its review of the budget proposal.
Besides cuts, Stewart has suggested different service taxes as a way to diversify the city’s tax base and reduce the property tax rate.
Instituting a public service tax of 10 percent, which would appear on electric bills, and raising the communications services tax, which appears on phone and cable bills, from 4 percent to 5.22 percent would allow the city to draw back the millage rate to 6.922 and keep its target operating budget at $116.4 million.
New taxes or increases in taxes, however, are not popular among council members.
Deile said citizens would prefer to see taxes encompassed in their property tax bill than on monthly service charges.
“That seems to be the clear message that we’re hearing out there,” Deile said.
After the tentative millage rate is set Monday, there will be two public hearings before council members vote on the final budget.
A public hearing will be held Sept. 9 and another public hearing will be held Sept. 23 before council members vote that evening.