Many of the City Council’s public discussions leading up to its vote on the 2012 budget were on the levying of tax dollars – not spending.
The council Wednesday night approved appropriations for the city’s 2012 budget totaling $112,074,356, and the budget ordinance passed in tandem with a resolution changing the process by which property tax bills are determined.
Driving the proposed change was an average citywide decrease in assessed valuation of 2.5 percent, which Mayor Jim Brainard said was the first decrease in Carmel’s modern history. To offset the overall decrease, a resolution was proposed to use a maximum tax levy instead of a flat tax rate.
“Of course, the cost of city services hasn’t gone down even if property values have,” said accountant Curt Coonrod. “We’ve calculated the levy to offset that decrease in assessed values so that the average tax bill will be the same as last year.”
Coonrod added that the “average taxpayer” should expect to pay the same in property taxes in 2012 as they will pay this year. The goal of the resolution, he said, was to keep tax bills level.
Councilman John Accetturo, however, said setting a maximum levy disguises an increased tax rate, as it is expected that most residents will experience property tax bills that are unchanged despite a likely decrease in their homes’ assessed value.
“There’s revenue needed in the city to operate at the levels submitted by the administration, and the basic truth is the tax rate has gone up,” he said. “You just backed into the tax rate that will support the budget presented.”
But Coonrod said the levy was determined before the budget.
“We did not first determine how much money the city should spend,” he said.
The levy was determined, he said, by adding 2.5 percent to 2011’s levy, and this totaled more than $43 million. Other revenues, such as county option income tax, were then added to this figure, and the city had to fit its budget within this total revenue, Coonrod said.
Brainard said it has not yet been determined if the city will again use a flat tax rate beginning in 2013.