Cape Coral City Councilmembers knew this year’s budget would be their hardest one yet, and so the began working on it in December, the earliest such date for a budget workshop.
Yet as City Manager Terry Stewart unveiled his proposed budget this week, some council members contend their work is just beginning.
“The budget is at a starting point,” Councilmember Tim Day said.
Whether Day’s fellow council members are all starting from the same point is another matter. Consensus on difficult issues has remained elusive for the current Cape council and, thanks to a 32.8 percent drop in property values, this year’s budget promises to be one of the most difficult on record.
The proposed fiscal year 2010 budget stands at $380 million, a 26 percent drop from the current year. The millage rate needed to meet that number is set at 7.776, or $7.78 for every $1,000 in assessed property value, a 63 percent increase from the current millage rate of 4.769.
One point of contention in the upcoming budget talks is bound to be over how best to reduce the millage rate. In the proposed budget, the introduction of three new taxes and fees would allow the millage rate to shrink to 4.515, lower than the current rate.
The new taxes consist of a public service tax that would add 10 percent to electric bills, an increase in the communications services tax that appears on cable and phone bills from 4 percent to 5.22 percent, and a fire services assessment.
The new fees are intended as a way to diversify the city’s tax base, thereby decreasing its reliance on property taxes and the fickle housing market.
But some council members are vehemently opposed to any new taxes, even if they would mean a corresponding drop in the millage rate.
“I think they’re wrong, they’re regressive. They’re certainly the wrong thing to do right now,” Councilmember Pete Brandt said.
At least one of the new taxes, the fire services assessment, is not likely to appear in the final budget, after it failed to garner the necessary support among council members during a workshop meeting Monday. The full assessment rate would have meant a draw back on the millage rate of 2.475 mills.
Others on the dais would prefer to leave the funding mechanism in the hands of the citizens.
“It’s something that should be put to a referendum,” Councilmember Eric Grill said of the public service tax.
“Until we can get our ducks in a row financially as a city, we don’t need to be taking more money from people,” he added.
Meanwhile, cuts are on the table as well.
Proposed is the elimination of three more firefighter positions — on top of the 26 eliminated last year — which officials say could increase response times and so insurance premiums; the elimination of 15 additional police positions– on top of the 29 sworn positions cut in FY 2009; and “sizeable” reductions in parks and recreation.
Proposed is no expansion to the current parks system, the closure of facilities on city holidays, the elimination of all city-sponsored events, the elimination of city contributions toward community sponsored events and the closure of the Yacht Club pool from October through February.