On Thursday, the Canton City Council conducted a work session to begin reviewing its proposed budget for the year.
Canton City Manager Scott Wood said the proposed $32.4 million budget assumes the city will raise its millage rate from 6.88 to 7.187 mills.
The rate is considered revenue neutral because most taxpayers saw their property values decrease by the same percentage as the rate increase.
Also, state revenue rollback calculation allows the county to raise its rate to any point below the revenue neutral rate to not be considered a tax increase.
A homeowner of a $200,000 house with a standard $5,000 exemption paid about $510 in property taxes this year.
Wood said the city is expecting its property tax digest to decline by 5 percent and the rate increase would cover the $260,000 shortfall that would stem from the digest’s decline.
The overall budget is up slightly from the current $32.3 million budget, but Canton leaders said they were planning on going through the numbers to make additional cuts to avoid the revenue neutral increase.
Wood said the city has worked hard to transfer allowable projects into the city’s Special Purpose Local Option Sales Tax fund and noted he’s already made $524,908 in cuts before presenting the draft to the City Council.
The city’s general fund is proposed at $10.7 million; $900 in its cemetery fund; $220,500 in its hotel/motel tax fund; $2.9 million in its SPLOST accounts; $3.8 million in its roads and sidewalks fund, down considerably from $6.6 million; $250,631 in its impact fee fund; $11 million in its water and sewer fund; $1.1 million in its stormwater fund; $1.1 million in its sanitation fund and $1 million in its municipal court fund.
The stormwater fund came under scrutiny when the Stormwater Advisory Board requested the council to reduce the fee by 25 percent.
Members of the board were alarmed when they learned the city had been using some of the fund’s revenue to pay for the Hickory Flat Highway and Waleska Street pedestrian improvement projects, improvements to Main Street and upcoming improvements to Marietta Road.
Mayor Gene Hobgood said he would consider reducing the stormwater fee charged to residents.
He also said he and the other council members are also hoping to find areas they can cut in order to avoid a millage rate increase
The council on Thursday decided to not move forward with a 3 percent cost-of-living raise for all of its 125 full-time employees.
It asked the city manager to use about $160,000 of the money to implement merit raises for qualified employees.
“It’s just an ongoing process,” Hobgood added.
Council member Hooky Huffman noted cities such as Woodstock, Holly Springs, Ball Ground and the Cherokee County government have all raised their millage rates to compensate for the decline in property tax values.
Canton, he added, may need to do the same.
“We’re trying our best not have one, but it wouldn’t surprise me if we did,” he added.
Council member Bill Bryan said he didn’t think it would be “fair” to raise the millage rate on Canton residents so long as the city’s senior homestead exemption remained in place.
Council member Glen Cummins added the council has agreed to reduce the amount budgeted for its travel, education and training, which he said would demonstrate to residents that they are trying to be “frugal.”
Councilman Bob Rush said he hopes enough cuts are made so the city will be able to avoid the millage rate increase, but added he was “resigned” to that hope not becoming a reality.
“No one wants to raise the tax, but there isn’t any place else we can cut,” he added, noting the city is already down to as few employees it can muster.