Taxes in the city are expected to increase for the second consecutive year.

City council Tuesday night said it expects to implement up to a 3-mill property street light tax to its budget in 2016.

The city can charge up to 5 mills for street lights, per a 2014 revision of the state’s third class city code.

The 3-mill hike would generate about $190,000 in revenue for the city. It would equate to a property tax hike of about 7.5 percent.

“It’s not something we want to do, but we have nowhere to cut,” said Mayor Tom Donaldson.

The tax would help pay for the city’s $210,000 annual electric bill for street lights.

The city on Thursday will introduce a proposed $8.6 million budget, which is expected to include the tax hike.

However, the 3-mill increase could be lowered before the budget is passed in December.

Council said a $125,000 sewer project may be cut in half due to phase construction that would span multiple years.

“That’s a mill right there,” said councilman Richard Schontz.

The city last year raised its debt service tax by 1.25 mills to 7.5 mills. The city can raise that tax up to 10 mills.

Council also could increase its 2-mill recreation tax, but all of its other tax rates are at the maximum allowed under state law.

The overall property tax rate this year is 40 mills.