HUMBOLDT – After well over an hour of discussion, Humboldt council members Monday night approved for publication a 2017 budget that includes a 5-mill ad valorem tax levy, to 90.564 mills.
It didn’t come easily.
With the body seemingly on the verge of approving a 3-mill levy, Cindy Hollingsworth questioned whether it would be better to go with the higher levy of 5 mills, which would raise about $15,000 more in tax revenue. Her rationale, drawing on comments from City Administrator Cole Herder that the greater tax would benefit street improvements, was that another 2 mills would not be a burden of consequence.
An example: An owner whose home has market value of $100,000 — on the high side for many in town — would pay an additional $23, less than $2 a month. She argued financial advantage was meaningful for the city.
No other council members signed on.
Then, Mayor Nobby Davis, who has no vote and can’t offer a motion, stumped in favor of the 5-mill increase, noting businessmen, such as himself, anticipate cost increases each year and arrange to meet them, as should the city.
His comments caught the attention of several, with Councilman Otis Crawford repeating Hollingsworth’s motion. “I don’t like to increase taxes any more than anyone else,” Crawford said, but there are times it is necessary.
The 5-mill levy proposal passed 5-2, with Jeb Kaufman absent because of a work commitment. A hearing on the budget will be at the council’s Aug. 8 meeting. Then, budget authority — what the city legally can spend — and the levy cannot be increased, but can be decreased.
“I can work with a 3-mill increase,” or none at all, Herder said early on, but agreed that the higher tax revenue would be helpful as the city deals with street upgrades and other infrastructure needs. Reserves, often drawn on in the past, also need to be replenished, the city’s auditor has mentioned several times.
Herder included in the budget a 4 percent increase in water revenue, which portends an enabling ordinance likely of that amount. He also proposed a five-year plan with annual rate increases of about 3 percent to put the Water Department on solid footing. This year $72,000 was transferred from the gas fund to balance the Water Department budget. In 2014, water rates were increased 20 percent.
“We have a lot of needs at the water plant,” Herder noted.
A compelling reason to increase the levy, and tax revenue it generates, is a state law that takes effect in 2017 that will limit tax dollar increases for local governing bodies to no more than the consumer price index percentage rate. Cities or counties that wish to go beyond will have to secure taxpayer approval in a referendum.
For the record, Humboldt’s budget projects net expenditures in 2017 of $3,198,029, including $1,272,639 in the general fund.
