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Cape to set tax rate maximum Monday

By Staff | Jul 23, 2011

Cape Coral City Council will set the tentative millage rate Monday night and is expected to have two public hearings — Sept. 8 and 22 –before establishing the final rate on the 22nd.
It’s unknown whether they will have any other workshops besides the three remaining scheduled meetings.
City Manager Gary King’s budget, released two weeks ago, was developed using the mill rate of 7.9702, approximately $7.97 for $1,000 of taxable value.
King is proposing a total budget of $445,063,873, which is a decrease of more than 6 percent from the 2011 amended budget of about $478 million. The adopted budget for the current year was approximately $444 million.
The proposed operating budget, or general fund, is $135,621,689. That figure is 1.9 percent lower than the 2011 adopted budget of about $2.62 million and a 5.8 percent drop from the current year’s amended budget.
Of the $136 million, about $112 million is operating expenditures, $18.7 million is undesignated reserves and $5.19 million is designated reserves.
City council also could adopt the roll back rate of 8.2208, or $8.22 for $1,000 of taxable value. The “roll back rate” is the amount needed to raise the same amount of revenue.
The difference for taxpayers would be about $13, based on per capita taxes, according to city documentation.
Councilmember Chris Chulakes-Leetz said he would not support the roll back rate. He added that the term “roll back rate” is a misnomer, and is instead a “consistent revenue rate.”
He said he’d like the property tax rate to be reduced a tenth of a mill, or maybe two tenths of a point. But ultimately, the final rate is council’s decision, not Gary King’s.
“City council decides the budget and the city manager lives within it,” he said. “If I hear the city manager say he can’t, that’s not the guy I expected when I hired him.”
Councilmember Derrick Donnell, currently seeking re-election, said endorsing the roll- back rate would be tantamount to political suicide during election season. But it was important, he said, for citizens to understand that the roll back rate represents keeping city services at the same level.
With only 25 homes left eligible for the recapture rule and property values still not seeing any increases, the difference has to be made somewhere, or the city could face some difficult decisions, he said.
The recapture rule is a state provision that allows local governments to “recapture” tax breaks given when property values boomed. Tax increases for homesteaded, or owner-occupied, properties were capped at 3 percent per year. When values went down, these property owners paid “recaptured” increases.
Donnell said he favored the roll back rate during the candidate forum on Thursday but added Friday that it is important to take the spin out of what the roll back rate means to taxpayers.
“Raising the millage is not synonymous with raising taxes,” he said. “The city, at some point, has to realize you can’t cut any more or you cut services. I believe that’s where we are now.”
Councilmember Marty McClain said he was in favor of leaving the millage at the current rate of 7.9702, but, like Donnell, thinks the city is reaching the precipice of cutting services and that future councils, and citizens, are going to have to make some tough choices about where their city is headed.
“At some point in time, residents are either looking at a diversification of the tax base, or an increase in the taxes they pay. Either that or they will lose services,” he said.

Staff Writer Tiffany Repecki contributed to this report.