MAYORS MESSAGE

Craig A. Stough            9/21/2006

 

"Property Tax Relief Proposal"

 

Sylvania City Council has begun discussions concerning the 2007 Operating Budget and the possibility of reducing taxes.  During their September 18th meeting, I brought an appropriate and workable tax reduction proposal to City Council that would give every property owner in Sylvania property tax relief in the coming year.

 

Property tax relief is not a new idea in Sylvania.  Several years ago the City administration identified a surplus beyond what was necessary for current operations in the street lighting fund.  With City Council's concurrence, the street lighting assessment was not collected for a two year period, saving our taxpayers nearly half a million dollars in assessments on their property tax bills.

 

We now have identified a surplus in the Capital Improvement Fund.  Based on the guidelines of the new City of Sylvania Financial and Debt Policy recently approved by City Council, the City should maintain $15 million in the Capital Improvement Fund for a variety of reserve and borrowing issues.  That fund currently has an unencumbered balance of just under $23 million and can be reduced.

 

For years, the City has collected 1 mil of property tax for General Obligation Debt Retirement to pay the interest and capital on the approximately $16.7 million of debt the City currently carries, or about $430,000 of property tax each year.  The proposal is to not collect that millage next year, and instead transfer $430,000 from the Capital Improvement Fund into the Debt Retirement Fund.

 

I would not be proposing this property tax reduction if I did not believe the financial condition of the City is strong and the delivery of City services is being made efficiently and effectively.  City income tax receipts are up about 8% so far this year, due in part to an improved economy and new businesses in the City.  Next year promises continued improvement.

 

Therefore every property taxpayer in the City can hopefully look forward to a little property tax relief next year.  I have every reason to believe that City Council will agree and authorize this property tax relief as a part of the 2007 Budget.