West Lafayette residents will get the opportunity to sound off about the 2014 spending plan at Tuesday’s city council meeting.
The council will have a public hearing on the budget at 6:30 p.m. Tuesday — rescheduled from the usual Monday meeting because of the Labor Day holiday — but the council will not vote on the ordinances.
The advertised budget proposes to raise $9.6 million from property taxes and to spend $18.3 million. But Clerk-treasurer Judy Rhodes cautions that the advertised levy and estimated tax rates are intentionally higher than expected.
“We expect that the levy and tax rate will be significantly lower,” Rhodes said. “They are being advertised deliberately higher than what we expect to collect.”
This is because the property assessments have not been certified by the state and are subject to change depending on appeals, so the Department of Local Government Finance recommends that local financial officials advertise their levies and tax rates high.
The reason, Rhodes explained, is that once advertised, local governments can lower the levy and tax rates, but they cannot increase.
The county’s gross assessed value increased about 3 percent, but property owners can appeal the assessments. Similarly, Rhodes anticipates that the assessed value of property in West Lafayette also grew. This means that tax rates might drop a fraction from the 2013 rate of 87 cents per $100.
“I believe that our assessed valuation will grow several percent so that our tax rate will be essentially flat,” she said.
Rhodes expects that the city will lose roughly $930,000 to the circuit breaker, which is the constitutionally adopted protection that caps property taxes at a percentage of a property’s gross assessed value. The percentage varies by class: Homes are capped at 1 percent, rentals and farmland at 2 percent and business property at 3 percent.
Still, there’s a $9.4 million gap between the proposed spending and anticipated levy from property taxes.
Rhodes said the gap will be filled with expected income tax revenue in the second half of 2013 and all of 2014, as well as cash on hand. This revenue is expected to be about $12.4 million, covering the gap and leaving the city a modest cash-on-hand balance, which will be used in the 2015 budget-making process.
The meeting begins at 6:30 p.m. at West Lafayette City Hall, 609 W. Navajo St.