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City cuts proposed tax increase in half

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By Johnathan Ryan

Lancaster City Council gave final reading of its 2008-09 budget Tuesday night, and it includes half the tax increase that was initially proposed.

Council voted unanimously to approve the $20.7 million budget, which represents a 3.5-mill tax increase instead of 7 mills. The budget, which takes effect July 1, reflects a 19 percent decrease over last year's budget.

"You have a budget," announced Councilman John Howard, who serves as finance committee chairman, after Tuesday's vote.

The proposed millage increase was reduced after council voted at a special budget meeting on June 17 to reduce budget allocations. Exactly $100,000 was cut from reserve funds earmarked for possible use in city retiree health insurance, leaving $50,000 in the allocation. An additional $18,600 was reduced.

The net city tax increase to the resident who owns a $100,000 home in 2009 is $2.60.

The tax increase will help pay for increased insurance costs, motor-vehicle usage and a maximum 2.8 percent cost-of-living raise for city employees.

In the gross revenue account, the city is calling for a 3 percent increase in water and sewer rates. That's estimated to bring in an additional $140,000 in revenue.

The increase is needed to help pay on loans taken out to upgrade the wastewater treatment plant and to help with other expenses, such as the salaries of two new sewer employees, fuel costs and lost revenue due to conservation efforts resulting from the drought, said City Finance Director Jim Wilson.

For the current fiscal year, revenues in the water department are expected to come in about $200,000 short due to less consumption of water by city water customers.

Contact reporter Johnathan Ryan at jryan@thelancasternews.com or at (803) 416-8416