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City Budget Analysis: What Will Proposed Tax Increase Pay For?

Posted on June 25, 2015

City Budget Analysis: What Will Proposed Tax Increase Pay For?

On June 16, 2015 Anita Favors Thompson released the City Manager’s budget for 2016. The proposed general fund budget calls for a $10.8 million property tax increase.

In an effort to determine why the $10.8 million was needed and where it would be spent, we met with Heath Beach of the City’s Budget Office.

Here is what we learned.

The City detailed in their budget documents that the $10.8 million increase in property tax revenue “is due to a proposed millage increase of 1 mill for FY 2016.”

It turns out this is not the case.

Mr. Beach said the increase in property values in 2016 will result in an additional $1.6 million in tax revenues without any millage rate increase.

This means the proposed 27% millage rate increase, from 3.7 mills to 4.7 mills, will raise an additional $9.2 million, not $10.8 million.

If you assume that the highest priority during this budget cycle, public safety, will be funded with the $1.6 million generated by the increase in property values – not the proposed millage rate increase, that leaves approximately $2 million required to fund additional police department resources.

Now the question becomes, what part of the budget will the $9.2 million raised by the proposed millage rate increase fund?

Personnel Expenses -$3 million annual increase for pay raises and additional officers

The budget documents indicate personnel expenses increased by $3 million from the previous year. Of this $3 million, approximately $2 million is slated for new police officers and $900,000 is going towards a 3% raise for all general government employees.

New Software -$2.2 million annual increase

Mr. Beach confirmed that the information system expense for computer software upgrades will increase by $2.2 million or 30% to an annual expense of $9.2 million.

Replacing One Time Revenues – $3 million annual increase

Mr. Beach confirmed that over the last two years, 2014 & 2015, the City has used reserve funds to pay for increases in recurring expenses. Approximately $3 million of the proposed tax increase will go to plug the hole left by the one time revenues that are no longer available.

A review of past budgets indicates that one-time revenues were needed for a $2.1 million increase in personnel expenses (pay raises and benefits from previous 2 years) and a $900,000 recurring increase in the general fund contribution to Star Metro in 2015. The general fund in 2016 is scheduled to contribute $7.8 million to Star Metro operations.

Human Services -$400,000 annual increase

The expenditures for Human Services, which are implemented by non-profit organizations,  will increase by $400,000 from $1.2 million to $1.6 million.

_____

The total of the items above accounts for approximately $8.6 million of the $9.2 million revenue raised by the tax increase.

Tallahassee Reports will next publish an analysis of the small increases in expenditures that account for the remaining amount proposed to be raised by the property tax increase.

6 Responses to City Budget Analysis: What Will Proposed Tax Increase Pay For?

  1. Elaine Reply

    June 25, 2015 at 11:17 pm

    $900,000 going towards a 3% raise for all general government employees?
    State employees have the opportunity to fund city employees’ raises when they have not had one in years?
    Property value increases and mileage increases? Apparently those in office stem from a “handout” mentality. Money grows on trees to them.

    • ReplyGuy Reply

      June 26, 2015 at 9:26 am

      State employees received a 3% increase a couple of years ago.

  2. merry ann frisby Reply

    June 26, 2015 at 6:39 am

    The City electric rates are already extraordinarily high. I am sorry for the City employees that want a raise but this is on the backs of already burdened electric rate payers.
    The very poor in the City are already struggling.

    I fail to see how property rates have increased. Home sales are dim at best and prices are low. I think we need to be asking the property appraiser how he determined these figures.

    If there is a tax increase. I will have to raise the rates on my rental properties to deal with it. I feel sorry for my renters.

  3. Chris Reply

    June 26, 2015 at 7:59 am

    I miss Dan Kleman….

  4. Fred Ingley Reply

    June 26, 2015 at 8:04 am

    This tax increase on real estate will hurt the poor, most of which are minorities since it will be passed along as rent increases. It’s just like any other increase in”business costs”, it’s passed on to the customer.

    • Edward Holifield, M.D.

      Edward Holifield, M.D. Reply

      June 30, 2015 at 3:54 pm

      First there was the gas tax, which hurts the poor and minorities the most.

      Then there was the sales tax inspired by the Chamber, the Leadership Tallahassee and the Imagine Tallahassee types. This created a $90 million slush fund for corporate welfare, which hurts the poor and minorities the most.

      Now there is the proposed 27 percent increase in property taxes that hurts the poor and minorities the most.

      One can only conclude that Gillum and his cronies could care less about the poor and minorities. After all, they don’t contribute to their campaigns, and often don’t even vote.

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