City staff urges commission to raise tax rate

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By Mark Scohier, Staff writer

Chiefland commissioners are about to break the bank.
That was the message from city staff Monday night at the city’s first budget workshop of the year.
“We have spent more than we have taken in,” Finance Coordinator Laurie Copeland said, urging that commissioners choose to raise the city’s property tax rate from the 4.75 mills it has hewed to since 2008 when it was cut from 4.7536.  
A mill represents $1 of each $1,000 of assessed property value, which, for example, means a property owner with a house assessed at $112,000—the median value of Levy County homes in 2010—would owe about $532 with a millage rate set at 4.75.
As property values fall, which they have throughout the state, so does the amount of money a city can collect from that property, unless, of course, the rate is raised. In 2009, Copeland said, total taxable value for property owned within city limits was at $144.3 million. Three years later, it’s now at about $128 million, a number which is expected to drop further by October.
Officials can choose to adopt a roll back rate, which helps offset the decline in property value without actually increasing the amount of taxes owed by property owners.
But in Chiefland, Copeland explained, the commission has not in the last few years chosen to do so. Property owners have actually paid less, year after year, and departments, such as Chiefland Fire and Rescue, have had to make cuts and make do with less.
“We really cannot afford to stand on the millage again this year,” she said.    
The city needs to bring in $642,148 from property taxes in order to balance the general fund budget, according to a city report, but taxes from the current millage rate come up about $31,000 short. The report proposes city commissioners raise the rate to 4.99 mills.
“It’s not going to raise a lot of money,” Copeland said, “but it will keep you from going deeper into the hole.” Simply cutting budgets won’t work as a “Band-Aid” any longer, she said. “Why? Because we have broken vehicles. We have broken equipment.”             
City Manager Grady Hartzog said city staff would continue to “work with what they have. But we need to at least consider the roll back rate.”
In addition to adopting a roll back rate, Copeland said, commissioners could also look at increasing the local option gas tax, taking a cut from a business tax on licenses for insurance companies and renewals of business licenses.
“We don’t need to get hung up on chasing pennies,” Mayor Teal Pomeroy said.
“We really need to look at what we can collect revenue on,” Copeland said. “We’ve tried cutting, but it hasn’t worked very well.”                
Hartzog said, “Look at it, review it, and maybe by the next commission meeting we can come up with some kind of guideline.”
Pomeroy said he’d like to keep the millage rate where it is. “If we had set it back at the roll back rate the last few years, we’d be in the same exact position.”
Hartzog said staff would prepare two tax rate scenarios, one at 4.75 mills and another at 4.99 mills, for commissioners to consider for the next meeting on July 23. Commissioners said they would decide on a preliminary rate then, adding that it could be adjusted lower if necessary in subsequent budget meetings.
Copeland said a millage rate would have to be turned in to the county by Aug. 1.