Sebastian Council considers higher tax rate, lower taxes

SEBASTIAN – For the sake of public hearings and advertisements, the Sebastian City Council approved a preliminary, higher tax rate than what they expect to implement Wednesday evening.

Even if the council were to approve the higher rate, the city would expect the average homeowner’s property tax bill to go down. However, the city would expect to collect an extra $230,000.

The Sebastian City Council will have two public hearings on the city’s budget on Sept. 13 and 22 before finally approving the property tax rate – also known as millage.

The city’s current millage rate, 3.456, means that an average homeowner with a $200,000 home and a $50,000 homestead exemption, could expect to pay $501.84 this year.

With the proposed higher tax rate of 3.594, the same homeowner could expect to pay $426.97, assuming property values decrease 15 percent, as the Property Appraiser’s Office suspects will happen.

If property values don’t decrease, but stay the same, the tax bill could be about $36 more.

Ed Herlihy, the city’s Citizens Budget Committee chair, recommended to the council that they set their millage rate higher – given that property values are expected to continue to drop – so that the city would not fall into a deeper financial hole.

He estimated that the city could collect approximately $230,000 more with the higher millage rate than if it were to keep the current rate.

If the current millage rate were maintained, City Manager Al Minner explained, the city would collect approximately $4 million in property taxes, instead of about $4.2 million with the higher rate.

Minner recommended to the Sebastian City Council that they approve the preliminary, higher millage rate to give them some breathing room as they finalize the budget. Per state law, the city could choose to lower the millage rate during the public hearings in September – but they cannot increase it without mailing each registered property owner at the city’s expense.

City Councilwoman Andrea Coy appeared to favor a higher millage rate, telling her fellow council members that they have held the line on the rate for years.

Coy said that all along the city has told residents that “the day is coming” that the rate would have to be increased.

“The day is probably here,” she said.

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