Property tax rate debate expected
City Manager John Szerlag’s proposed budget for Fiscal Year 2017 includes a millage rate reduction of .207 for Cape Coral property taxpayers.
Since property values in Cape Coral rose by 8.37 percent in 2016, according to Lee County Property Appraiser Ken Wilkinson, the city stands to receive an additional $1.6 million in tax revenue over and above the 6 percent increase the city had built into its budget figures for next year.
If City Council ultimately approves the proposed millage rate reduction submitted by Szerlag, the average homeowner with an assessed value of $100,000 after exemptions would save about $20 on their property tax bill.
Some on council think there should be more savings returned to taxpayers, including Councilmember Richard Leon.
“As council we can go through the budget and cut some things to reduce that even more,” Leon said. “We can discuss ideas and find things we can hold off on. If you look at the money we are collecting it’s an astronomically large amount of money.
“There are some things I think we need to slow down on,” added Leon. “Take the sale of the city land on Monday, that’s $1 million which probably will go into the general fund, so we could use that to offset the budget even further.”
Szerlag’s budget proposal for 2017 has reached a total of nearly $670 million, of which nearly $195 million lands in the General Fund. The General Fund includes ad valorem taxes as its main revenue source and is used for general operations including police, fire, public works, parks, planning, community development and administrative services.
The city’s millage rate for the current Fiscal Year was 6.957 mils. Szerlag’s .207 proposal reduces that to 6.750 mils for 2017, a savings of 2.98 percent. That figure would generate $78.1 million in tax revenue for the city, which is $2.1 million more than the “rollback rate” of 6.5702 mils. The “rollback rate” set by the Property Appraiser is the rate where property owners would pay the same amount in taxes as they did last year.
The city also is proposing to keep the Public Service Tax rate at 7 percent and the Fire Service Assessment cost recovery rate at 64 percent. Those rates would bring revenue to the city of an estimated $7.6 million and $21.8 million, respectively.
“I think the city manager has finally realized that it’s time to reduce taxes, but I don’t think he has gone far enough,” said Councilmember Rana Erbrick. “We’ve got the Public Service Tax and the Fire Service Assessment on track and those are semi-recession proof, so I’m looking to go to the rollback rate.”
She indicated that a slow, steady increase in property values is better than it was in the early 2000s just before the economy collapsed.
“We’re getting back economically and the ton of permits being issued is just fabulous,” Erbrick said. “We just need to try to keep the city on track.”
Councilmember Jessica Cosden didn’t want to judge Szerlag’s budget proposal before hearing what the rest of the panel had to say.
“As you know, this is my first budget cycle,” Cosden said. “I don’t want to jump to any opinion until I’ve heard from the city manager on his proposal. It’s easy as a politician to say reduce taxes, but until I know more I won’t say what I will do.”
In July and August, the Budget Review Committee and council discuss budget items in order for council to set the millage rate and submitted to Wilkinson. Once set – which council will do on Monday – the rate can not be raised before being finalized. The final rate determined in September can, however, be lower. Wilkinson then sends out TRIM notices to property owners with the tentative millage rate in August.
City Council schedules two public hearings in September to approve the budget and the millage rate, which goes into effect on Oct. 1. Tax bills start arriving in mailboxes in November.
Some highlights of the budget continues the city’s road paving ($6.5 million), capital maintenance ($789,000), street light installation ($100,000), and median improvements ($306,000).
The proposed budget also includes money for construction of Fire Station #11 on Burnt Store Road at Northwest 11th Street and a fleet maintenance facility to replace the Everest Parkway facility.
The budget also adds 17 full-time positions to the employee ranks, which includes nine firefighters to staff the new fire station.
This is the third time in four years the city has reduced the property tax rate. The millage rate stood at 7.957 in 2013. With a 0.250 rate reduction accompanying the Public Service Tax and a 0.750 reduction accompanying the Fire Service Assessment, and the proposed 0.207 reduction this year the city has reduced the millage rate by 15 percent.