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

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

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 budget that will exceed $8.6 million and is expected to include the street light tax.

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 about part of the tax council could reduce.

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.

Authority dissolved

The city’s proposed budget also will be altered due to a proposed ordinance that would dissolve the city parking authority and turn over its responsibilities to the city.

Donaldson said the move is a mandate of the $6.8 million bond issue it received from PNC Bank for the purpose of building a new parking garage.

“It eliminates a level of bureaucracy,” Donaldson said.

The five-member parking authority board manages most parking lots in the city and the tier garage.

Donaldson said the move would turn that responsibility over to the city, which would need to hire a parking manager.

“It would be a paid, part-time position,” Donaldson said, adding the cost would be about $30,000 annually.

He said Jim Chiprean, chairman of the parking authority, would be a leading candidate for the appointed position.

“He already knows what is going on,” the mayor said.

The authority’s $1.8 million in debt was refinanced into the city’s bond issue. The rest of its assets would be passed to the city when it dissolves.

The authority manages about 450 parking spaces with monthly permit costs of $30 to $50. Those costs are set to increase by $10 next year.

Donaldson said the authority’s board must vote to dissolve, and that vote may occur next month.

The authority collects monthly parking permit money for the city. It uses its revenue for parking maintenance, to pay for its debt and to make contributions to the city.

City treasurer Jeff Smith said the consolidation would bring additional revenue.

“It would be an influx of money,” he said.

The city’s new parking garage will join a Marriott Springhill Suites hotel as part of the Centre City project.

No fireworks

Butler again will not be able to pay for a July 4 fireworks display.

“If we have to raise taxes, I’m not going to burn money on fireworks,” Donaldson said.

The mayor said it would be up to private donations to fund the show. Peoples TWP last year covered the initial $11,000 expense of the show, and then the show got bigger when Pennsylvania American Water chipped in another $4,000.

“We’re open to any donations again,” the mayor said.