On a split vote of 4-2, Platte City Board of Aldermen voted to increase its property tax rate by five percent.
The action raises the city’s real estate tax levy from $1.0395 to $1.0886 per $100 of assessed valuation.
Aldermen Tony Paolillo and Ron Porter voted against the tax hike. Aldermen voting in favor of the tax increase were Debbie Kirkpatrick, Ron Stone, John Higgins, and Brad Fryrear.
Prior to casting his vote Tuesday evening Paolillo said, “In April, voters voted down the levy for the school district at a rate of 63 percent in the City of Platte City. Just remember that when we vote on this tonight that these people elect us and they are who we actually work for.”
The finance committee consisting of Stone and Higgins supported the property tax increase and recommended the board adopt the $0.0491 increase.
“Tony’s point is well taken,” said Higgins. “Nobody at the table here wants an increase on this type of thing, but at the same time I think the public wants to maintain what we have tried to establish here throughout the years.”
The finance committee along with D.J. Gehrt, city administrator, argued that it would be a mistake to postpone the tax rate increase for another two years.
“This is definitively not something a city administrator wants to do in their first year even if it’s a small tax increase,” said Gehrt. This is part of a larger budget issue (and) trying to make sure that the city structurally comes to a soft landing in its budget.”
Gehrt said the 2013 fiscal year budget reflects a freezing of staff salaries, as well as a limited use of fund balance reserves. Additionally, the city will continue with not having a personal property tax.
Gehrt said the tax increase will enable the city to obtain $708,000 in property tax revenue during the next fiscal year, which will put $26,020 in additional revenue in the cities’ hands. City officials plan to use one percent of the increased revenue to offset the decrease of assessed valuations, but majority of the increased revenue will go to debt services in an effort to decrease the cities’ general fund debt at a faster rate.
“We have been using approximately a quarter of a million dollars a year in capital improvement funds to support our general fund debt payments. This year, by doing small things including increasing the levy by $26,000 we are going to reduce that transfer from general funds from the capital improvement fund from $256,000 in the last year to $50,000 this year and that allows us to keep moving forward with street programs and storm water programs.
“So were not asking for a small property tax increase in isolation. We’re asking more as a series of steps that tries to make a soft landing without a huge impact,” said Gehrt. “By making all of these small little changes, none of them are major; we’re able to change the budget from having a structural deficit where in the past couple of years the increase in revenue was less than the increase in expenditures.”
The approved property tax rate will cost Platte City residents with a home valued at $100,000 an additional $9.33 per year. A home valued at $200,000 will see a hike of about $18.90 per year.
According to the ordinance, the $1.0886 property tax rate is divided with $0.5244/hundred dollars for the general tax levy and $0.5642/hundred dollars for the debt service levy.