Mill Creek considers 1 percent tax hike

MILL CREEK — If the Mill Creek City Council approves a 1 percent property tax increase, homeowners will be charged $1.91 per $1,000 assessed value, and the city will see an additional $50,229 in revenues next year.

Staff proposes using the additional revenue to pay for rising operating costs and bolster reserves for capital projects.

Finance director Landy Manuel said compared to the city’s $10 million annual budget, a more than $50,000 bump in revenue seems trivial. However, the city would keep up with rising costs and see an additional $760,000 during the next five years if the increase is applied each year.

The council will continue the discussion during its Nov. 23 meeting.

Manuel said he’s not trying to scare the council; rather he’s taking a realistic approach to the city’s budget. The proposed 2011-12 involves laying off staff and reducing hours.

“We could pull from reserves but that’s only a two-year fix,” he said. “We need to look at the other side of the equation and look at bringing in more revenues.”

Mill Creek homeowners are charged $1.71 per $1,000 assessed value or $686 for the owner of a $401,200 home. The city’s proposed 2011-12 budget assumes there will not be a property tax hike.

But an anticipated 9 percent drop in property values in 2011 means taxpayers will be charged more money to compensate, regardless if council approves a 1 percent increase. The owner of a $401,200 home will see their property value dip to $365,092. The $1.71 rate would then increase to $1.89 per $1,000 assessed value.

Next year, taxpayers also will be charged an additional $95 for the increased emergency medical services levy. Voters approved raising the rate to 45 cents per $1,000 assessed value.

Mayor Mike Todd said it’s been a tough year for taxpayers already paying for increased taxes.

But it’s hard to ignore charts showing the increasing gap between the city’s expenditures and revenues, Todd said.

“It’s a losing battle. Structurally, we’re in bad shape,” he said. “I’m proud we didn’t take money in the past just because we could, but now the lines won’t cross.”

Councilwoman Kathy Nielsen said additional revenue would mean the city can maintain service levels and staff, namely a full police force.

“We need to invest in our future; citizens expect us to,” she said. “Homeowners moved here for a reason. We’re supposed to be investing, not holding on,” Nielsen said.