Property taxes will increase less drastically this year than in previous years, but city leaders had to use millions in reserves to make ends meet.
To meet this years fiscal year 2011 budget, Mayor Tom Ambrosino said they would have to tax to the levy limit and then shore up a huge deficit by using $2.814 million from the Rainy Day Fund.
It’s a scenario that isn’t so good for the City’s balance sheet through the eyes of Wall Street, but is not such a bad thing for the wallets of local taxpayers.
On Monday, the City Council made a couple of votes that affirmed the preliminary tax rates, which still have to be approved by the state.
The residential tax rate this year will be $14.44 per thousand dollars of value. The commercial rate will be $29.31 per thousand dollars of value. The tax rate is combined with individual property values to determine the amount owed on the property tax bill.
So, for example, if a home is valued at $200,000 by the city, one would multiply 200 by the residential tax rate, which will be $14.44.
On the average, taxes will be static.
Some people may see tax increases; others might see tax decreases. However, on average, most will see only slight increases. That was also the case last year, when property taxes stayed mostly the same. Seemingly, the days of 10 to 20 percent tax increases every year are as far gone as the days when simple ranch homes in Ward 6 sold for half a million dollars.
Certainly, the two circumstances are linked.
The numbers for this year’s tax bills work out something like this.
On average, the single-family tax bill will go up by $25, or 0.75 percent. A two-family home will see an increase of $62, or 1.5 percent. Three-family homes will increase by $22, or 0.54 percent.
Condo owners this year will see a decent decrease, on average, in their tax bills. Condo owner bills should decrease by $66, or 2.4 percent.
The unfortunate thing about the entire situation is that the city is having to use a substantial amount of savings to bring the budget in line. It’s pretty much the first time that the Rainy Day Fund has had to be tapped. Last year, as hard as things were for the City, it was able to wiggle out of using any savings.
This year, though, is a different story.
Next year, Ambrosino said there should be enough savings to carry them through another tough budget year.
After that, in fiscal year 2013, there will be no savings left and there will have to be a dramatic turnaround in the economy.
“If things don’t pick up by then, we won’t make it,” said the mayor.