Gainesville City Council is split over whether to spend a budget surplus to beef up its reserves or cut taxes.

Councilmen Bob Hamrick and George Wangemann advocated giving tax relief, with Wangemann saying that the extra $1 million now proposed to beef up reserves could serve as an "economic stimulant."

Councilman Danny Dunagan and Councilwoman Myrtle Figueras pushed for using the surplus to increase reserves so the city can cover one-and-a-half months of city expenses instead of one month as called for in the current budget.

Council members debated the matter at a work session Thursday morning in City Manager Kip Padgett's conference room. Mayor Ruth Bruner was not at the meeting.

The good news for Gainesville residents is that the proposed tax rate is at least staying the same at 2.92 mills, with 1 mill equal to $1 for each $1,000 in assessed property value.

City Council is set to take its first vote on the tax rate at 5:30 p.m. Tuesday at the Public Safety Complex.

Final approval is set for June 21.

The council plans to adopt its fiscal 2012 budget on June 21. The $26.7 million spending plan, a 3.7 increase from the current budget year, takes effect July 1.

The surplus from this year's budget also would be used to pay for several new police cars, cover the city's commitment to a grant that brought in new firefighters and road projects.

"I appreciate the fact that we have a rainy day fund. We should have that," Hamrick said as part of Thursday's discussion. "I think it's a wrong time to add to it. ... Now is the time, with the economic downturn, to give some relief to the taxpayer."

Wangemann said he believes if another recession rears its head, "that's going to create additional hardships on our people and maybe fewer jobs than we now have."

"I think the greatest think we can do right now is help those people who need our help the most - and that is the taxpayer," he said.

"Predictions are always predictions," Figueras said, "and you don't know what to do, ever. What if my house burns down? What if a tragedy happened to Gainesville? My ‘what ifs' always come back to we as taxpayers, all of us, will look to the city to do something.

"And what if we don't have enough to do something? I simply concur with staff with what they've done (on the budget) because we cannot predict the what ifs."

"The thing we need to remember is these funds have come from our taxpayers," Wangemann said.

"But they've come at the cost of a lot of people being cut," Figueras said.

"A lot of sacrifices," Dunagan said.

Dunagan added that he didn't know "what $1 million would do if you distributed it over $4 billion worth of real estate (in the tax digest), but it would be miniscule."

"Every little bit helps," Wangemann said.

"I agree, George, but it doesn't help if you roll (the tax rate) back now and next year you've got to raise it," Dunagan said.