By Amanda Raymond

amanda.raymond@salisburypost.com

SALISBURY — Salisbury City Manager Lane Bailey is recommending a 1.2-cent increase in property taxes for the 2016-2017 fiscal year.

Bailey presented a budget proposal for the 2016-2017 fiscal year during the Salisbury City Council meeting on Tuesday.

During the meeting, Bailey explained that the city lost the privilege license tax last year for the current fiscal year, a loss of revenue that accounted for $320,000 — or 1.18 cents of property tax. Funds from the city’s fund balance were budgeted to cover the lost revenue, but Bailey said the city could not continue to replace the reoccurring revenue with the fund balance each year.

Bailey said there was also a “significant” increase in health insurance and workers compensation insurance this year.

The increases combined were more than $810,000.

“Due to these pressures, I am recommending a 1.2-cent increase in property taxes,” Bailey said. “This would be less than $1.36 per month for the average homeowner in Salisbury.”

The current city property tax rate is 66 cents per $100 of valuation. The proposed increase would make the rate 67.2 cents per $100 of valuation.

Councilman David Post said the 1.2-cent increase represents the amount that was taken away from the city when it lost the privilege license tax.

“Basically the state took away the dollars and we essentially had to replace it,” he said. “I guess the state legislature decided that we should collect the tax rather than it collecting the tax.”

Bailey also said the city estimates Fibrant will cost the general fund $3.5 million in the current fiscal year, and the city is reducing the general fund contribution to $2.9 million for the next fiscal year in the proposed budget.

Bailey recommended a 2.5 percent water and sewer increase to continue treating water and wastewater, meeting required regulations and delivering excellent service, and a 20 percent increase in the commercial stormwater rate to pay for more rehabilitation projects and stream monitors.

The proposed budget also includes funding for sidewalk improvements and the housing stabilization program from the general fund.

The council scheduled a public hearing on the proposed budget for June 7.

Contact reporter Amanda Raymond at 704-797-4222.