City considers tax hike fund several projects
City property owners may pay more in taxes next year.
City council Tuesday night discussed a possible hike to the city’s debt service tax to help pay for the West New Castle Street bridge project and the Sullivan Run projects.
Council has the ability to raise the tax, currently at 6.25 mills, up to 10 mills. The maximum increase would cost the average taxpayer about $50 per year, said councilwoman Kathy Kline.
The city receives about $411,000 through its debt service tax. Council is looking to gain about $250,000 through a proposed hike.
While the tax increase is an option, the city also is looking at a possible way to avoid the hike.
Council was discussing the potential tax hike when solicitor Jim Coulter suggested rolling the cost into the proposed bond issue set to pay for a new parking garage.
Council is getting a bond issue to pay for a 225-space parking garage that would be part of the Centre City project, which also includes a Rite Aid Pharmacy and a proposed Marriot Springhill Suites hotel.
The estimated $4.4 million garage would require about a $5.8 million bond issue.
Coulter said the cost for the other projects could be added to that bond since they meet the criteria of long-term capital projects.
Each member of council expressed interest in the idea.
“It’s something that is certainly an option,” said Councilwoman Cheri Readie.
Council on Thursday will make a motion allowing the city to increase the debt tax up to 10 mills next year. That number would be lowered if the city can add the cost to the bond issue.
Coulter said the rate can always be lowered, but it cannot be raised without starting the process over.
“We can rearrange it once we have a game plan,” Kline said.
The overall city tax rate is 38.75 mills.
