In a recent government meeting, city officials discussed the implications of adjusting the property tax millage rate for the upcoming fiscal year. Under state law, the city is required to maintain a revenue-neutral stance, which currently sets the millage rate at 8.125. However, the rollback rate, calculated at 7.326, would significantly reduce tax revenue, generating only $1.1 million compared to the $7.9 million generated at the current rate.

To address budgetary needs for fiscal year 2025, officials proposed an increase to a millage rate of 9.125. This adjustment would result in an annual tax increase of approximately $140 for homeowners with properties valued at $200,000. The proposed rate is deemed necessary to fund essential services and cover increased costs, including a new pay plan for city employees that has added $2.3 million to the budget.

The discussion highlighted the city's commitment to maintaining a healthy fund balance, which is currently at 28% of the general fund budget. Officials noted that balancing the budget without increasing the millage rate would require utilizing $1.4 million from the fund balance, leaving little room for emergencies.

The pay plan, implemented in January, aims to make city salaries competitive, particularly for police officers, whose salaries were raised from $46,000 to $55,000 to prevent turnover in favor of higher-paying jobs in the private sector. The city council is expected to vote on the proposed millage rate increase in the coming weeks, which is crucial for sustaining city operations and attracting talent.