LOCK HAVEN - Taxpayers will see a nearly 10 percent increase in their city real estate tax bill if there are no changes in the 2012 budget between now and next Monday.
City Council passed the tax hike on first reading Monday night. The second and final vote takes place next Monday at 7 p.m. in City Hall.
The 9.6 percent increase translates to 0.6 of a mill, according to City Manager Richard W. Marcinkevage.
The city levies two different millages on real estate, one on land and the other on buildings, designed to encourage development on vacant lots. Critics of the two-tier system say it has outlived its usefulness.
Mayor Richard P. Vilello Jr. is among the critics and has said he would like to see it abolished.
With that in mind, Marcinkevage presented three options to council - divide the 2012 tax increase between both land and buildings, as would be done any other year; add the increase to land and not to buildings; or add the increase to buildings and not to land.
He also presented the figures for 13 different properties from the tax rolls so council could see how each of these options would play out.
Council decided to levy the increase on both land and buildings. Millage will increase by 1.83 mills for land, for a total of 20.08 mills, and .38 of a mill for buildings, for a total of 4.12 mills.
The data for the 13 properties that Marcinkevage presented shows:
* His own parcel has its land assessed at $17,900 and a building assessment of $79,200. His tax is now $622. That will increase by $64 for next year.
* A parcel with land assessed at $27,900 and a building assessment of $269,800 is taxed $1,518 this year and will see an increase of $154 next year.
* A parcel with land assessed at $26,600 and a building assessment of $218,000 is taxed $1,300 this year and will see an increase of $132 next year.
* A parcel with land assessed at $28,500 and a building assessment of $181,200 is taxed $1,197 this year and will see an increase of $122 next year.
* A parcel with land assessed at $20,600 and a building assessment of $190,200 is taxed $1,087 this year and will see an increase of $110 next year.
* A parcel with land assessed at $22,200 and a building assessment of $109,300 is taxed $813 this year and will see an increase of $83 next year.
* A parcel with land assessed at $23,400 and a building assessment of $100,800 is taxed $804 this year and will see an increase of $81 next year.
* A parcel with land assessed at $23,100 and a building assessment of $53,100 is taxed $620 this year and will see an increase of $63 next year.
* A parcel with land assessed at $14,200 and a building assessment of $96,000 is taxed $618 this year and will see an increase of $63 next year.
* A parcel with land assessed at $15,600 and a building assessment of $68,600 is taxed $541 this year and will see an increase of $55 next year.
* A parcel with land assessed at $16,700 and a building assessment of $60,100 is taxed $529 this year and will see an increase of $54 next year.
* A parcel with land assessed at $19,200 and a building assessment of $44,100 is taxed $515 this year and will see an increase of $52 next year.
* A parcel with land assessed at $14,900 and a building assessment of $36,800 is taxed $409 this year and will see an increase of $42 next year.
Under the other two options, figures varied from property to property. Some would see a smaller increase with a land-only tax hike, and others would make out better with a building-only tax increase.
Council Vice President Stephen L. Stevenson called the increase "acceptable" since taxes have stayed the same since 2006. A $64 increase over six years is not bad, he said.
"We've cut budgets, eliminated positions. We did everything we could," he said. "I think this is a modest increase."
Councilman William E. Baney also called the increase modest, noting that the budgets for most city departments are at or below this year's. He laid the blame for rising expenses on what he called "unanticipated costs."
He said when he first joined City Council, he wanted to find other revenue sources as alternatives to taxes, like timbering, windmills and advertising on police vehicles. He suggested a citizen task force be set up to search for such alternatives.
He also asked Jeff Snyder, a soon-to-be Clinton County commissioner who attended the council session, if he would participate in a public meeting on the topic. Snyder said he likes the idea and would encourage local governments to cooperate on this and other efforts.
Local resident Richard Morris asked if any change in the tax base is forecast for 2012, noting that as Shaner Investments sells its new town houses, those structures would enter the tax rolls without the tax forgiveness extended to the developer.
Marcinkevage said there has been a small increase which should result in $3,000 more in real estate taxes.
The city uses its real estate tax revenue for three purposes - general, debt repayment and levee maintenance. The revenue from the tax increase will be applied to "general" use, according to the city manager.
The original levee debt will be paid off in 2013, the mayor said. But that doesn't mean the city will be debt-free.
