Cherryvale city taxpayers will have to dig a bit deeper in their wallets to fund city services and programs for 2012 under a budget proposal that was announced Monday.
City councilors on Monday voted to publish a proposed budget plan for 2012 that calls for a mill levy, also known as a tax rate, hike of 4.414 mills. In the proposed budget plan, the City of Cherryvale’s levy will increase to 43.958 mills — which is up from the 39.544 mills assessed in the current 2011 budget year.
If approved following a public hearing on Aug. 1, the budget will result in a property tax hike of about $30.50 — or roughly $2.54 per month — for a local home valued at $60,000.
So, why is next year’s budget calling for a tax increase?
City administrator Greg McDanel explained that the City of Cherryvale was confronted with two primary issues: increases in fixed costs, such as gasoline and electricity, and the elimination of a mill levy reduction sales tax.
In 2007, city voters approved a one-half cent sales tax that was devoted toward lowering the city’s property tax rate. That sales tax did result in a property tax decrease 14.74 mills (53.672 mills in 2007 compared to 39.021 mills in 2008).
However, city voters in April 2011 voted to continue a one-half cent sales tax but devote all proceeds from that tax toward capital improvements projects and to retire debt for a sanitary sewer project.
Eliminating that mill levy reduction sales tax has resulted in fewer dollars and cents in city hall coffers to keep tax rates down. However, it does not mean that local property tax rates will go back to the pre-2007 sales tax levels, McDanel said.
“When we proposed eliminating the mill levy reduction sales tax, we had every intention of keeping our mill levy as steady as possible,” he said. “But, Cherryvale is no different than so many other towns: we are facing increased costs in the midst of a declining economy. And, that leads to fewer dollars to pay for local services.”
McDanel described the proposed 2012 budget plan as “bare bones” — meaning there were no significant additional programs or services scheduled in 2012 that are not provided in 2011. Through job attrition, the City of Cherryvale has already eliminated two positions within the public works department as a budget-tightening measure.
The proposed budget plan calls for the City of Cherryvale’s mill levy to increase from 33.914 mills in 2011 to 34.801 mills to 2012 and the Cherryvale Public Library’s levy to increase from 3.836 mills to 6.157 mills. The City of Cherryvale imposed a 1.794-mill levy to retire debt, however that levy will not be needed for 2012.
That brings the total levy in the proposed 2012 budget plan to 43.958 mills. Spending authority in the 2012 budget plan will be $3.65 million while actual expenditures in the 2011 budget is forecasted to be $3.37 million.
McDanel emphasized that the projected $3.65 million in budget authority does not mean that every dollar in the budget will be spent.
“We strive to carry money over from one budget year to the next,” he said. “That’s how you keep your mill levy maintained. If we spent every dollar in the 2012 budget, we would have absolutely nothing to build a budget for 2013. We strive to underspend our budget and keep our costs as low as possible.”
The summary of the proposed 2012 budget plan is printed on page B7 of this week’s Montgomery County Chronicle.
The public budget hearing will be held at 7 p.m., Monday, Aug. 1 at City Hall, 123 W. Main. Taxpayers will be given the opportunity to ask questions or raise objections to the use of tax funds in the 2012 budget plan.
After the hearing, the council will decide whether to formally adopt the 2012 budget document.
