VIDEO: Newark considering modest tax, utility rate hikes in 2013 budget
Newark City Council is considering an operating budget for 2013 that would include slight raises to property tax and utility rates.
The council held a public hearing for the budget at last night's meeting. Under the proposed budget, property taxes would rise by 1.5 percent, around $7 a year and electric rates would increase around $11 a year starting in July 2013.
City Manager Carol Houck says smaller increases for property taxes and utility rates were recommended by council. Taxes rose by 6 percent in 2012 and by 10 percent the year before.
"They were more interested in incremental increases that we hadn't done over time to help us maintain our services," she says.
Those services involve increased operating and healthcare costs for city employees and services.
Houck says 2013 is projected to be a transitional year for Newark since a smaller surplus projected for next year won't greatly change the city's diminished cash reserves.
"We're only projecting about a $175,000 surplus. I'm hoping that some of measures we've put in place and some of the new things in 2013 we've put in place will help that," she says.
Newark Mayor Vance Funk says incremental increases will keep the city in good shape.
"My philosophy is that taxes should track the rate of inflation and you get in trouble when you skip a year and try to make it up with much larger tax increases," Funk says.
A 5 percent raise to water utility rates could also go into effect in July if city officials are unable to obtain a revenue package from the state legislature that helps compensate for services provided by the county seats to tax-exempt property.
Funk says Newark has the highest amount of tax-exempt properties in the state because of the University of Delaware and believes the city should be part of a group that includes Wilmington, Dover and Georgetown.
Councilman David Athey, who announced at the meeting that he would not be seeking reelection in the spring, says city officials are trying to keep costs affordable for local residents.
"We know we increased taxes last year, we've certainly had over the last several years water and electric rate increases. You can can only go to that so many times. You do that to many times and you're not competitive," he says.
The council is expected to make a decision on the budget at the Nov. 26 meeting.
In regards to his decision not to run for reelection, Athey says he wanted to allow for someone new to represent Newark's 4th district. He was elected to the position in 2003.
"It's just time to step aside and get on with other things I want to do with my life, and frankly I think it's healthy to let new ideas and new perspectives come into council." he says.
Athey is Newark's 2nd-longest serving councilman, having been elected to five terms. He'll close out a ten-year career as a councilman in April.
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