tax cut is in store for Fayetteville residents if

City Council approves the proposed fiscal 2000

budget.

Council

conducted first reading of the document Monday

and will vote on its adoption this coming Monday.

The meeting starts at 7 p.m. at City Hall.

An

estimated 7 percent growth in the value of

taxable property in the city can fund the

proposed $6.9 million general fund budget and

leave room for a tax reduction of five hundredths

of a mill, said city finance director Lynn Raven.

mill is one dollar per $1,000 of a property's

assessed value. A .05-mill tax cut will reduce

taxes on a $100,000 home by about $2 a year. But

city officials are hoping to do better than that,

if the estimate of 7 percent growth in the tax

digest proves to be conservative.

State

officials are expected to approve Fayette

County's tax digest near the end of the calendar

year, and officials are hoping that the growth in

property value will allow a tax cut of as much as

a fourth of a mill.

The

city currently taxes local property at 2.77 mills

for its general fund, plus .75 mills for capital

projects, for a total of 3.47 mills, yielding

about $138.80 on a $100,000 home (minus homestead

and other exemptions).

Mayor

Mike Wheat said this year's targeted reduction

may not be much, but gradual reductions each year

since 1994 have reduced taxes on a $100,000

property by about $100 a year, almost half of the

city's taxes. The city's tax rate in 1994 was

5.97 mills. The goal, he added, is elimination of

property taxes altogether, replacing them with

sales taxes, business license fees and other

types of taxation.

"Clearly,

the city's services have improved," Wheat

said, adding, "The staff has done a great

job" of carrying through on the City

Council's stated goal of tax reduction.

"It's

important to have goals," he said.

If

adopted by council, the general fund budget will

see an increase of 8.47 percent over the 1999

spending plan, said Raven. Included in the

document are plans to add six new employees to

the city payroll, including three in the Public

Works Department.

Salaries

overall are expected to increase by 3.9 percent

through a combination of merit pay increases and

the city's longevity incentive program.

In

addition to the general fund, the city's water

and sewer fund is expected to generate $3.3

million in revenue and $2.7 million in expenses,

with the remainder saved for future capital

improvements. The city's water and sewer systems

are funded through fees for water and sewer as

well as "proportionate share" fees paid

for their developments.

The

city's impact fee fund is expected to grow by

$233,100, with only $9,050 in budgeted

expenditures. But numerous capital projects are

waiting for state and federal approval or other

bureaucratic hurdles, and all the money will be

spent in good time, said Raven.

The

.75-mill capital projects fund will generate

$266,198, and other sources will provide an

additional $13,202, for a total of $279,400 to be

used for repairs to city facilities, plus a

variety of downtown revitalization programs under

the Main Street Fayetteville. Two-thirds of the

capital projects fund is dedicated to Main Street

projects.

Total

of all budgeted funds is $10.7 million.

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