Gainesville residents are one step closer to paying 12 percent more in property taxes this fall.

The Gainesville City Board of Education adopted a tentative millage rate Tuesday of 7.81 mills, up from the current rate of 6.96 mills.

One mill equals $1 for each $1,000 in assessed property value. If the tentative millage rate is adopted, the owner of a $183,000 home, the median home price in Gainesville, will pay $156.23 in additional property tax this fall.

The board passed the tentative millage rate for this fiscal year, which started on July 1, with a 4-1 vote. Board member Sammy Smith dissented.

In June, former Gainesville school system Superintendent Steve Ballowe suggested the board raise the millage rate by 20 percent to 8.34 mills.

Janet Allison, finance director for the Gainesville school system, said the board will host three public hearings before it will set the millage rate at the end of the month.

According to the Gainesville school system’s final budget the board passed on Aug. 18, the tentative 7.81 millage rate would help the board to pay off about $1.7 million of the system’s estimated $5.6 million deficit by June 30, 2009.

As approved in the budget, the board will have a deficit of about $3,854,000 by the end of this fiscal year.

School board chairman David Syfan said that $1.7 million is still a working figure.

"The amount of deficit reduction is going to be dependent upon what the state does for financing, so that number is subject to change," Syfan said.

In addition to the roughly $650,000 in state cuts the district was mandated to absorb last month due to shortfalls in revenue, Gainesville school system interim superintendent Merrianne Dyer said the system could also lose $130,000 if the state cuts Homeowner Tax Relief Grants.

Neither of those state cuts had been factored into the school system’s final budget when it was approved in August, Syfan said.

The board assumed a 95 percent collection rate when finalizing the budget that estimates about $54,484,000 in revenue and about $52,738,000 in expenditures.

Smith, who was also the sole dissenter in the vote to adopt a final budget, said the tentatively adopted millage rate is "too ambitious."

"I still have concerns with the local economy and with the projected tax collection rate," Smith said. "That’s a pretty healthy jump in a millage rate from October ‘07 to October ‘08."

Syfan said he believed in order to have a realistic budget deficit plan, the board didn’t "have a lot of choice."

Allison said she and Dyer have been working on a deficit reduction plan for the school system, and anticipates presenting it to the board for approval at this month’s board meeting.

The board also reviewed a system wide strategic plan Tuesday that would require the system to track its yearly progress toward goals including academic achievement, student, parent and community participation in school system governance, efficient instructional and administrative processes and improved financial performance. Dyer encouraged the board to carefully review the strategic plan and scorecard before adopting the plan in October.