City property taxes will rise five percent under the City of Lancaster’s proposed 2009 budget, Mayor Gray announced Tuesday night.
Gray told City Council and guests that he did not intend on raising taxes, but that economic realities have forced his hand.
The tax hike “equates to a $35 increase for the average residential property for the year,” said City Administrator Patrick Hopkins.
Hopkins added the city’s expenses are only up 1.8% in 2009 as opposed to 2008, but that the city is taking a hit on the revenue side of the equation.
One of the key factors driving revenue loss is that the city is earning about $450,000 less interest on its money due to the turmoil in the national economy, he explained.
Hopkins also mentioned that economic development is slowing down, so the city is getting less revenue from building permits and also less property tax revenue due to a large number of assessment appeals.
A few key points from Gray’s budget address:
“We have slowed the growth of government spending from a high of 12.6% in 2005 to 1.8% in 2009“
“We have reduced the size of city government. In 2006, the City General Fund budgeted for a workforce of 439 full time employees. In 2009, we have reduced our workforce to 411 employees. Staffing levels will continue to decline in 2009.”
“For the first time, all City employees will make contributions to the cost of health insurance benefits. Department directors and non-union employees will increase their contribution to a range between 4% and 8% of the costs of the insurance provided.”
The proposed 2009 budget will be available on the City of Lancaster’s website starting Wednesday. It will be discussed in greater detail in a series of meetings over the coming weeks before a final vote occurs at City Council’s regularly scheduled meeting on Tuesday, December 16.
