New budget includes a tax increase
By Charles Sercombe
City officials agreed on a financial plan to fix the city’s budget for the next three years.
But the budget comes with a price for property owners.
Recently, the city council agreed to a budget deficit elimination plan that includes a small property tax increase of 1.89 mills.
That millage will last only three years and will generate about $325,000 a year. The money will be earmarked to pay a lawsuit filed years ago by police and firefighter pensioners.
The tax money will lighten the city’s general fund load, but it will not end the city’s obligation to pay the lawsuit settlement.
Finance Director Nevrus Nazarko came up with the plan, and he said that after three years the city will still continue making payments at least for the next 15 years or so.
Most of the retirees are in their 80s, he said.
Nazarko said he asked for only a three-year tax so the city can stabilize its finances. It is hoped that at the end of three years, he said, the city will be able to shoulder the remaining payments.
Or maybe not.
In which case the city council may agree to extend the tax.
But the tax is far from a done deal.
The city has to ask a circuit court judge to order the tax onto property taxes, Nazarko said. The city will argue it cannot afford to make the payments.
A judge could just as easily refuse to do that, Nazarko conceded.
It was no easy decision by the council. Councilmembers debated the issue for a long time in a special council work session a week ago.
Councilmember Cathie Gordon argued against the tax, saying residents are also struggling financially.
“We can’t keep going to the same well,” she said.
Gordon suggested that instead of a tax, the city should impose a service fee on non-profit organizations, which would also include churches and mosques.
Nazarko said that for the average homeowner, the extra tax will cost only $35 per year.
“It’s a small price to pay,” he said.
Councilmember Tom Jankowski agreed, saying that the city cannot possibly afford to pay huge lawsuit settlements.
“We, the taxpayers have to pay for these lawsuits,” he said.
At last Tuesday’s regular council meeting, the deficit elimination plan was accepted with only Councilmember Robert Zwolak voting in opposition (Councilmember Abdul Algazali was absent).