MOD 589
04-12-2009, 12:25 AM
A Naples financial planning committee recommended Friday that the City Council not change its 2010 tax rate to reflect a rollback rate, a move that would sharply increase the tax rate.
Going to the rollback tax rate, as it is known, would mean the city would bring in the same amount as revenue as it receives in the current fiscal year. Committee members said they didn’t support the concept of the rollback rate, because it would give the city a blank check to raise taxes.
“I am opposed to the rollback rate,” committee member Dolph von Arx said. “I think a rollback rate creates a price increase to the citizens, and it’s a price increase against value. You’re valued and appraised less, but you’re paying more.”
The rollback rate is the rate at which property taxes are set to raise the same amount of tax revenue as was raised in the previous year. During years when property values increase, officials can roll back the tax rate to a lower rate to bring in the same amount of revenue.
But the city of Naples is projecting a 15 percent decline in property values this year. That means to bring in the same amount of revenue as this year, officials will need to increase property taxes.
“I think we’re going to have to go to rollback,” said committee member Murray Hendel, who supported the rollback rate. “We’re going to have to pay now or later.
City Councilman Gary Price, who serves as the committee’s chairman, said the financial board isn’t ruling out increasing the tax rate. Instead, he said, the committee plans to recommend that if the city needs to raise taxes to offset the deficit, then Naples City Council should raise them by 10 percent.
That 10 percent increase, he said, would bump the tax rate up to 1.24 mills, which is $1.24 per $1,000 of a property’s assessed value.
The city is projecting a $2.5 million shortfall in fiscal 2010. That number, though, is based on the assumption the tax rate used is the rollback rate. The city’s rollback rate would need to be set at 1.33 mills, which is $1.33 per $1,000 of a property’s assessed value.
If the council doesn’t accept the rollback tax rate — and keeps the current tax rate — the city is assuming a $5 million shortfall in fiscal 2010.
Those shortfalls mean the city will need to look at several cost-cutting methods to make up the money. Among those ideas, which will be discussed during Monday’s Naples City Council meeting, are salary and benefit cuts, unpaid days off and layoffs.
Committee members said Friday that raising taxes wasn’t their first option. Instead, the board came up with a list of steps the city should take in an attempt to save money.
Among the steps listed were to use operation management to improve government efficiencies, appoint a blue ribbon pension committee to look at the city’s three pension plans and freeze capital improvements next year, except when it pertains to the health and welfare of the community.
The information from Friday’s meeting will be included in a report about the city’s financial health. That report, Price said, will be presented to council in May.
Committee members said Friday they were disappointed with the preliminary report, which didn’t outline specific steps toward fixing the city’s financial problems.
The final report, Price said, will be more definitive, and also will include reports written by each of the members.
The committee will meet one last time this month to put the finishing touches on the report. That meeting is scheduled for 9 a.m. April 24 at Naples City Hall, and is expected to last 30 minutes.
Naples City Council will discuss the fiscal 2010 budget when it meets starting at 8:30 a.m. Monday at Naples City Hall, Eight Street South.
Going to the rollback tax rate, as it is known, would mean the city would bring in the same amount as revenue as it receives in the current fiscal year. Committee members said they didn’t support the concept of the rollback rate, because it would give the city a blank check to raise taxes.
“I am opposed to the rollback rate,” committee member Dolph von Arx said. “I think a rollback rate creates a price increase to the citizens, and it’s a price increase against value. You’re valued and appraised less, but you’re paying more.”
The rollback rate is the rate at which property taxes are set to raise the same amount of tax revenue as was raised in the previous year. During years when property values increase, officials can roll back the tax rate to a lower rate to bring in the same amount of revenue.
But the city of Naples is projecting a 15 percent decline in property values this year. That means to bring in the same amount of revenue as this year, officials will need to increase property taxes.
“I think we’re going to have to go to rollback,” said committee member Murray Hendel, who supported the rollback rate. “We’re going to have to pay now or later.
City Councilman Gary Price, who serves as the committee’s chairman, said the financial board isn’t ruling out increasing the tax rate. Instead, he said, the committee plans to recommend that if the city needs to raise taxes to offset the deficit, then Naples City Council should raise them by 10 percent.
That 10 percent increase, he said, would bump the tax rate up to 1.24 mills, which is $1.24 per $1,000 of a property’s assessed value.
The city is projecting a $2.5 million shortfall in fiscal 2010. That number, though, is based on the assumption the tax rate used is the rollback rate. The city’s rollback rate would need to be set at 1.33 mills, which is $1.33 per $1,000 of a property’s assessed value.
If the council doesn’t accept the rollback tax rate — and keeps the current tax rate — the city is assuming a $5 million shortfall in fiscal 2010.
Those shortfalls mean the city will need to look at several cost-cutting methods to make up the money. Among those ideas, which will be discussed during Monday’s Naples City Council meeting, are salary and benefit cuts, unpaid days off and layoffs.
Committee members said Friday that raising taxes wasn’t their first option. Instead, the board came up with a list of steps the city should take in an attempt to save money.
Among the steps listed were to use operation management to improve government efficiencies, appoint a blue ribbon pension committee to look at the city’s three pension plans and freeze capital improvements next year, except when it pertains to the health and welfare of the community.
The information from Friday’s meeting will be included in a report about the city’s financial health. That report, Price said, will be presented to council in May.
Committee members said Friday they were disappointed with the preliminary report, which didn’t outline specific steps toward fixing the city’s financial problems.
The final report, Price said, will be more definitive, and also will include reports written by each of the members.
The committee will meet one last time this month to put the finishing touches on the report. That meeting is scheduled for 9 a.m. April 24 at Naples City Hall, and is expected to last 30 minutes.
Naples City Council will discuss the fiscal 2010 budget when it meets starting at 8:30 a.m. Monday at Naples City Hall, Eight Street South.