Wednesday, August 14, 2002
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Wednesday, August 14, 2002 |
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9% tax hike eyed for PTC By JOHN MUNFORD
Although its 2002-03 budget is essentially balanced, the Peachtree City Council still plans to increase property taxes this year with a 9 percent hike in the millage rate, blaming the financial fallout from the Sept. 11 terrorist attacks. City staff initially recommended a 15 percent millage increase, but council decided Monday night to reduce the increase to 9 percent. The millage increase council agreed to from the current rate of 4.315 mills to a proposed 4.70 mills will cost an additional $31 a year on a home with a fair market value of $200,000, according to city Finance Director Paul Salvatore. The increase is necessary to offset unforeseen increases in the city's property insurance and medical insurance programs, officials said. The city's property insurance and pension plan expenses increased dramatically this year thanks to fallout from the Sept. 11 terrorist attacks that have dampened the stock market and caused insurance premiums to skyrocket, Salvatore told council. "Sept. 11 is the biggest factor affecting this budget," said City Manager Jim Basinger. Although council was able to "balance" the budget through over $1.3 million in cuts to the public improvement program (PIP), the same thing can't be done next year, forcing some sort of millage increase or dramatic operating cuts, Salvatore indicated. "I think we ought to be accountable for the increases this year," said Mayor Steve Brown. The mayor also said the city's tax digest took a hit in the industrial sector as well, and he didn't see that trend improving soon, thanks to the economy. Councilman Dan Tennant at first opposed increasing the millage, saying council had already publicly committed to balancing this year's budget through state-required advertisements. But after much discussion, Tennant relented after he talked his fellow council members down to 9 percent from the 10 percent increase they had previously agreed upon. "Nine percent is still a single-digit (increase)," said Tennant, who tried to get council to agree on a 7.5 percent millage rate increase but failed. Facing a projected significant millage increase next year, some council members argued that an increase this year would "soften the blow" instead of using a dramatic increase next year. Without a millage increase this year, staff projected a 35 percent increase would be necessary next year to balance the budget. Also, city staff is working to bid out its medical insurance program and change its pension program to realize some savings both this year and next, Salvatore said. Salvatore added that any change in the city's local option sales tax percentage could cost Peachtree City hundreds of thousands of dollars. The city is negotiating that percentage breakdown again this year with Fayette County and its other cities. "That's our number one revenue stream," Salvatore said. The .385 mill increase will raise approximately $520,000 for the city, but that figure could change depending on the final numbers from the county's tax digest, which were not available by press time Tuesday. The first public hearing on the budget will be held at Thursday night's City Council meeting, which begins at 7 p.m. at City Hall. The decision for a millage increase comes on the heels of council slashing the city's PIP budget by $1.375 million several weeks ago. Council also agreed Monday to delay the debt service on 24 of 36 new police vehicles it plans to lease-purchase, which would yield a savings of $192,896.
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