In the first baby steps in writing the fiscal 2013 budget, the city government is discussing whether it might be necessary to raise Bowie’s property taxes and water and sewer rates next year.
Bowie’s fiscal year begins July 1, and numerous public hearings and workshops allowing public comment will be held during the spring to complete the budget. Monday night, city government staff asked the Bowie City Council for preliminary policy guidance on what the budget should include and what the tax and water and sewer rates should be.
The city’s general budget is fueled by property taxes. Since 1979, the amount collected from those taxes has gone up because of increasing property values. But with the recession tanking home values, the city doesn’t expect to see that type of growth in property tax money in 2013 and 2014, said Bowie Finance Director Rob Patrick.
“We will not have that built growth as in the past,” said Patrick. “The trends that we used to rely on have changed dramatically.”
Also, federal and state funds that the city receives, primarily used for road upkeep, are expected to continue to decline.
The city’s tax rate is currently $0.40 per $100 of assessed value. In its preliminary figures, the city staff is talking about raising the property tax three cents.
Mayor G. Fredrick Robinson and council members Isaac Trouth (District 4) and Todd Turner (At Large) said they wanted to keep the property tax at the same level that it is.
“I’m looking to keep the tax rate flat and core services at the current level,” said the mayor. “I know it’s going to be a challenge, but I’m confident that with sharp pencils it can be done.”
Turner and Trouth noted that Bowie has an emergency fund of $29 million, which is three times higher than required by city fiscal regulations. Now might be the time to dip into that emergency fund, they said.
Also, the two council members said that before a new item or project is added to the general budget, an equal amount in savings should occur elsewhere in the budget.
Patrick said it may also be necessary to raise the city’s water and sewer fee that Bowie homeowners pay quarterly. Under city policies, the operation of Bowie’s aging city water and sewage facilities must pay for themselves.
“The financial forecast model anticipated a 10 percent rate increase for fiscal year 2013,” his report stated. “It may be necessary to consider a higher rate increase due to declining user consumption and capital costs.”
City officials noted that the numbers they presented were preliminary working figures for the mayor and council to begin discussion. Under city policy, the city staff writes a proposed budget with input from the mayor, the council and residents. The council will then make the final decision on what the budget contains and tax rates and water and sewage fees.