The city of Soldotna’s proposed fiscal year 2013 operating budget may include a property tax reduction.
The proposed budget, which will be introduced to the city council next Wednesday, estimates appropriations greater than revenues by $84,562, said Soldotna City Manager Larry Semmens.
The estimated revenue for fiscal year 2013 is $9,378,283, while the estimated expenditures is $9,462,293.
However city officials say the proposed tax cut is justified by the growing amount of sales tax the city is estimated to collect in fiscal year 2013.
Action will not be taken on the budget until June 13.
Soldotna’s mill rate is currently at 1.15, but Mayor Peter Micciche and council member Dale Bagley will be pushing for that number to be reduced to .65. The mill rate for fiscal year 2012 was also reduced by half of a mill.
“This is the second consecutive year the city of Soldotna will be reducing taxes (if approved),” Semmens said.
One of the reasons for the proposed mill rate cut is the city was awarded $126,424 of revenue sharing from the state capital budget.
“The reason is because the city has adequate revenue that would allow a tax cut,” Semmens said. “We have good sales tax revenue. I think the city council wants to reduce taxes.”
The city is also estimating sales tax revenue to reach $7.5 million for fiscal year 2013, which is $700,000 more than the $6.8 million estimated in the original fiscal year 2012 budget
If the mill rate is reduced to .65, Semmens said the result would mean a decrease of $50 for every $100,000 paid in property tax.
“So if you have a $200,000 home, you have a $100 reduction in property tax,” he said.
The proposed mill rate change is estimated to decrease the budget by $240,000 in property taxes.
Micciche said he has been working toward operating the city fairly and efficiently, which is why he proposed reducing the mill rate for 2012 as well.
“If we’re taking in more than we need for quality, essential services, then that (money) would be returned back to the tax payers,” Micciche said. “We had a good year, that means revenues are up and we took in more than we needed again. So we’re proposing to cut the mill rate another half mill.”
Micciche said his eventual goal is to eliminate property tax in Soldotna, and at some point consider adjustments to the sales tax rate.
Logan Tuttle can be reached at email@example.com.