Gainesville City Council will hold a public hearing tonight on a proposed property tax increase to pay off debt, including on the old Hall County jail the city purchased in 2012.

These are payments the city cannot postpone, officials said.

If approved, the slight increase will also be used to fund the operation of local parks.

Gainesville officials are considering reducing the rate to $2.98 per $1,000 of taxable property, which is still a 7.19 percent increase over the full rollback rate.

To be considered revenue-neutral, the state requires local governments roll back the tax rate to adjust for growth in the tax digest resulting from property value reassessments. Anything other than a full rollback is considered a tax increase.

Of the total millage rate, $1.63 will be directed to general government expense, 75 cents toward parks operations and 60 cents to pay off outstanding debt and interest.

The tax digest grew to more than $3.9 billion this year from about $3.6 billion in 2014, and taxes levied grew by about $900,000.

A full rollback to 2.78 mills was seen as too much for a few different reasons, officials said.

The city’s general obligation debt is about $18.8 million and includes payments owed on the Frances Meadows Aquatic Center, downtown parking deck and lease payments on the old jail after the Corrections Corp. of America vacated the facility a few years ago.

The city owes $6.52 million on the jail alone.

Gainesville CFO Melody Marlowe, also serving as interim city manager, said state law prohibits the property tax rate for parks from falling below 75 cents. A full rollback would have put the rate at 72 cents.  

The potential tax increase would produce an additional $700,000 to pay for debt and parks, according to Marlowe.

As an example, the annual property tax increase would be $35 for a home with a fair market value of $175,000, according to officials.

City Council will hold two additional public hearings on the proposed tax increase in October.

Public hearings on Gainesville tax increase

When: 6 p.m. Tuesday, 9 a.m. Oct. 1 and 5:30 p.m. Oct. 6

Where: Public Safety Complex municipal courtroom, 701 Queen City Parkway, Gainesville