PALMETTO -- A proposed half-mill increase in Palmetto's property tax could be reduced to a .25 bump as final budget hearings draw near.
A mill is $1 for every $1,000 of appraised property value.
In July, City Clerk Jim Freeman tentatively suggested a half-mill increase based on several unknown factors in the budget process, primarily skyrocketing employee insurance costs.
Palmetto rejected its insurance company's proposed rate increase in excess of $900,000 and went out to bid. The city picked a different company, but the insurance bill will still be $700,000 higher.
While Palmetto City Commission voted 4-1 to approve the half-mill increase, it can still work to lower the rate all the way up to the final budget hearing. It cannot raise the millage rate once tentatively set.
Freeman said with lower insurance costs, staff is now recommending to commission a quarter-mill increase. If approved, Palmetto residents will pay an additional $25 a year for property valued at $100,000, which will generate about $171,000 in additional revenue for the city.
The lone dissenting vote to set the tentative millage rate higher in July was Ward 2 Commissioner Tambra Varnadore. She again expressed concern about the lack of review the commission has had on the budget other than staff presentations.
The city canceled two budget workshops.
"Without anyone protesting," said Mayor Shirley Groover Bryant.
The city's property tax base rose 5.3 percent in value this year. Even if the city doesn't raise the millage rate, the increase in property value creates more revenue.
The proposed quarter-mill increase, along with revenue generated by higher property values, will create $275,000 in overall additional property tax revenue for the city.
Commissioners have one final budget workshop scheduled Sept. 1 before two budget public hearings Sept. 14 and Sept. 28.
Varnadore and Ward 3 Commissioner Brian Williams expressed a strong desire to review the city insurance policy before the 2016-17 budget with some interest to either reduce or eliminate dependent coverage to bring costs down.
"We need to set some ground rules in what to expect in the next year," said Williams. "With one or two more meetings before finalizing this budget, it doesn't give us much time. We need to discuss what to do next year, if anything."
Mark Young, Herald urban affairs reporter, can be reached at 941-745-7041 or follow him on Twitter @urbanmark2014.