Consultant: Raise taxes

Published 11:17 pm Wednesday, March 16, 2011

A city financial consultant suggested Suffolk might have to raise its real estate tax rate to provide increased services needed in the coming budget cycle.

The proposed budget document has not yet been released, so it is not yet clear if city staff will recommend a tax increase. But various budget challenges, including a drop in real estate values, state funding reductions, needed capital improvements and additional fire and rescue staff, have produced a gap of at least $5.1 million.

That figure, according to David Rose, a financial consultant with Davenport and Company, is a minimum estimate of necessities based on deferring some other expenses. If the city were to include those other expenses in its coming budget instead of deferring them, the gap would be far more, he said — about $11.4 million.

Email newsletter signup

The $5.1-million gap, if filled with a real estate tax increase alone, would result in a 6-cent increase per $100 of assessed value. An $11.4 million deficit could be filled with a 13.5-cent increase.

In the utility fund, too, changes are proposed to balance the budget. Rose said the average water and sewer bill would increase by about 9.34 percent, assuming usage of 13 ccf. A ccf is a measurement equal to 100 cubic feet.

Rose also suggested new debt of $60 million for the utility fund and about $25 million for the general fund, as well as a restructuring of previous utility fund debt.

In the current fiscal year, general fund revenues from local avenues are slowly strengthening, said budget director Anne Seward.

Revenues exceeding budget projections include court fees, recreation fees, lodging, meals and tobacco. Collections from court, recreation and lodging fees all are up by 15-21 percent.

However, some revenues not meeting budget projections include emergency services fees, interest earnings, building permits, recordation fees and admissions tax. Admissions tax — the extra money tacked onto movie tickets, for example — is down by a single digit (8 percent). EMS fees are down 35 percent, with the others down between 10 and 16 percent.

The City Council set a public forum for residents to discuss budget issues, including services they would like to see and suggested funding avenues. The session is scheduled for March 23 from 5 to 8 p.m. in City Council chambers, 441 Market St.