Next year, Gainesville property owners will save on property taxes with help from federal money, but this will likely be the last time.
City Manager Bryan Lackey presented the preliminary budget to City Council Thursday, May 12, for the 2023 fiscal year, which begins July 1. The proposed budget features a full rollback of the general fund millage rate, pay increases for employees and police officers, a cost of living adjustment for retirees and more money for capital projects.
The general fund millage rate will decrease from 0.5 mills to 0.41 mills, qualifying as a full rollback, meaning that the city will pull in the same amount of revenue even as the value of taxable property increases. One mill is $1 tax per $1,000 in taxable value.
Gainesville has separate millage rates for its fire fund, police fund, parks and recreation and debt service. Those rates and the general fund rate add up to 3.656 mills total.
But, the city is using about $6 million in federal American Rescue Plan Act funds to apply a 1 mill tax credit this year. The city did the same last year, but Lackey said this is almost certainly the last time the city will be able to use a large sum of federal funds this way.
That means Gainesville property owners will pay the city a tax rate of 2.656 mills. The tax for a $250,000 home would be $664. That does not include any taxes levied by the city school system or the county.
The general fund budget is expected to increase nearly 5% to $35.4 million, due to strong sources of revenue elsewhere, including increases in sales tax revenue, permitting fees and fines and fees and forfeitures as the court system catches up to a backlog of cases, Lackey said.
Police officers will get raises of 5-7.9% depending on their position. The city is setting a higher starting salary for cops at a little over $50,000 annually, up from about $48,000, and younger officers will receive higher raises, Lackey said.
The city will have $4.6 million for general fund capital projects, about $444,000 more than last year, but Lackey said the reason for those savings isn’t ideal.
“While that’s good — I’m glad we can add more capital projects — it really comes from salary savings, because we’ve had so many vacancies this year,” Lackey said. “I would really rather have the people to provide the services.”
And, much of the extra funds could go toward merely sustaining plans as construction costs continue to rise, he said.
Capital projects set for the coming budget year include renovations to historic city hall, improvements at the Midtown Greenway, adding a pavilion and playground at Fair Street Neighborhood Center and sidewalk and roadway improvements.
Much of the extra money will go toward increases in energy prices and a 5% cost of living adjustment for city employees, which is the largest such adjustment in at least seven years, Lackey said, even if it doesn’t quite keep up with the fast pace of inflation over the last year or so. Retired employees will also get a cost of living adjustment, Lackey said, and it applies to those who retired by fall of 2021.
The city will add four firefighter positions each year over the next four years to prepare for a new fire station in 2026, Lackey said, and it will add one staff position for cybersecurity.
Councilwoman Barbara Brooks said she was pleased with the consideration of retired employees and pay bump to make Gainesville police salaries more competitive.
The city will hold public hearings on the budget on June 7 and June 21, and the city council is expected to adopt the 2023 budget on June 21.