Friday, December 3, 2021

Council approves Millage Rate, Budget

By Danielle Dodder

The final millage rate that the city will use for tax revenues was lowered by city council on Monday, from the 2.07 that appeared on tax assesments, to 1.9592. If it seems incremental to property owners reading this, that’s because it is.

The real difference lies not in the amount of money saved on a tax bill, according to city data, but in the impact to city funding: the difference between the rate the city budget was prepared under, 1.99, and last year’s rate of 1.89 is a difference of $722,745, according to city finance director Patricia Bliss. In contrast, the difference between last year’s rate and the rate now approved by council has an impact of about $30 to the taxpayer, based on the average island home value of about $500,000.

According to the city presentation, the city of Marco has two oddities that make creating a budget and millage rate especially contentious: the CAP and a near-total dependence on real estate taxes for revenue.

“It was well-intentioned and it worked well in the up times,” said council chair Gibson of the CAP. But he warned that it will now have long-term negative impacts on the city’s ability to provide services and maintain infrastructure as the budget is reduced each year. The CAP allows the city to add no more than 3% more in expenditures to the budget from the year before. The result is something like compounding interest in reverse, according to councilman Larry Magel. Everything from police cars to bridges wear down over time, and Gibson expressed concerns, “We keep deferring capital improvement projects, for 2 years and we’re doing it again this year. We may not be able to get there [in future years.]”

Patricia Bliss explained that many other cities have flexibility in setting millage rates because they have a diversity of funding sources, including franchise fees, utility taxes and other tax revenue. “They can lower the millage rate because of the other charges.” She also confirmed that the city’s budget is balanced, employees will receive no wage increases next year, and the city has funds in reserve.

Council also approved moving $500,000 from the water and sewer fund to the general fund for road resurfacing. This moved the source from residents water bills onto their tax bill, as part of the millage rate change. “Everyone drives on the roads,” points out Bliss, which makes it allowable as a general fund expense.

Council also approved the city’s budget. City manager Jim Riviere pointed out that the process of creating it began in April and ended with a “final chop” several weeks ago. “[The budget] is not just bare bones, it’s down to bone marrow.”

Leave a Reply

Your email address will not be published. Required fields are marked *