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November 13. 2012 10:34PM

Manchester tax rate rises 1 percent

MANCHESTER - The city's tax rate for 2012-13 has been set by the state at $22.18 per $1,000 of assessed valuation, an increase of 1 percent over last year.

The state Department of Revenue Administration established the rate this week. It represents an increase of 22 cents over the 2012 rate - well within the limits of the city's tax cap.

"That's a good thing; taxes are less," said Mayor Ted Gatsas. "I think it's sending a message to business to come on in because it looks like we're running a pretty effective city."

The tax increase, which is fractionally more than 1 percent, is 9 cents less than the 1.41 percent increase projected by the mayor in his budget, and less than the 1.47 percent hike allowed under the tax cap.

Total property valuation in the city increased by a bit more than 1 percent. Taxable property in Manchester is valued at $8,285,246,013.

Gatsas will start reviewing budgets with department heads for the 2014 fiscal year today.

The tax cap amendment to the city charter limits property tax hikes to the average increase in the consumer price index for the three calendar years leading up to adoption of the budget.

A final tax cap figure won't be determined until the consumer price index for all of 2012 is available in late January, but Gatsas said he is using a 2.2 percent tax increase as a guide in formulating budgets.

"I've told them to take a look at their actual (expenditures) of 2012 and use a 1 percent increase off of that," he said.

The first department to be reviewed is expected to be the highway department. That discussion will bring its own issues, since the mild winter of 2011-12 meant sharply reduced expenses for plowing snow and sanding roads.

Gatsas said the lack of snow meant the highway department's actual expenses were about $1,000,000 less than what would have been spent during a typical Manchester winter.

"We've got to have pretty serious discussions about that," Gatsas said. "Unless we plan on having no snow, we've got to look at something else."

The city also has to grapple with sharply higher pension costs for city employee retirements.

Gatsas, who says his own property tax bill will rise $51.94 this year, said no decisions have been made about how much of the increase in property tax revenues will be allocated to the Manchester School District.

Last year, the Board of Mayor and Aldermen allocated the entire increase in property tax revenue to schools.

Manchester's new tax rate of $22.18 is comprised of four parts.

Taxes attributable to the local share of school costs are $7.16 per thousand; the state education tax adds $2.46 to that.

City services make up $11.40 of the tax rate and Hillsborough County government costs another $1.16 per thousand.

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Bill Smith may be reached at wsmith@unionleader.com.


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