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Properly Tax Impacts While the City �mpioys a r�uml�er nf fi�nding snurces, only tl�e prnperty tax provides a stable source af revenues %r tlle Ciiy'S �3DI1C�� fire, streets, and parks & recreat�on %nctions. As �oted abave, w�i�e total spe�ding in the property tax-supported iunetions �as increased at belaw iz�flatiar� l�veis, t�� sara�e caz�.nat be said �or i�� property tax itsslf The following c�a�i s�ows a coznparison af the City's prop�rty tax levy a�d th� local inflatian rate. Swyear C�unulative Incrrf:ase 35.00% 25.00% � I5.Q0% "'""'� �...,^...,�,..� �. ,� "°" ��.-,�,..a�---.^...'""""y' 5.�0% _.._._.._ ...__�_...... ._______. _� .�.�.�,....� ......:........_._.............T..._.,............__......._......F�._...,.,......�........i.....��_ -s.oa�io - Zoo3...__. __._ zaQ� M..._ �oos _ �__�ioQb ....�_..iao7 ._ -��'axi..evy �-Jnilatian As is sk�owit� in the chart, over tl�e past 5�ears the Ci1:y's tax levy has incr�ased a corr�bined 28%, coznpared to the local inflatzan rate whic� has increased a earr�bined 14%. Tk�e reason the Cit�'s tax levy has outpaced inflaiion is two-fold. �'irst, the City lost over $700,00� in general purpose state aid d�ring this time, aboui ha�f of which was levi�d back. In adc�ition, ��on-iax re�unues such as cour� fines, s�reet repa'tr state aid, poiice a��d fire staie aid, and interest earnings, rerr�ained stagnant which placed even gareate� p;ressure an �he �a� levy ta �rovic�e new manies. Bear in mind, t�iat for the property tax-supported pragrams, 70% is fi.�zaded thro�zgh ihe tax levy, �he rest coni�s frorr� o�her sources. Tk�e end �ras�lt is that des ite health increases in �he ro ert �ax le the Cit �as realized a decline in real dallars — necessitating the elirninatian of staff posiiions, a reductio�� in par� impravemen�s, and the need io draw upon reserves. Budget Impacts for 200$ a�d Beyo�.d As is somew�at izxaplied above, the City's heavy relianee on tl�e property tax will likely efl��tinue far the for�seeat�le futur�. We do z�ai aniicipate any subsian��ve increase in non-�ax revenue sauxces for t�e City'� poIice, fire, streets, and general administrative arld finance functions, For 2008 a�c� beyond, it is expected that th� City's opera�ing cflsts will continue �a outpace inflation, ua�less fi.�ther sta£��g �eductions are made. This is largely a�tributable to the fact t�a� the majority of City services are labor-inte�sive, which generaily xuz� higher than most other operating costs. As a res�it, if ihe City desires to �naintain programs and services at their existing level, fiature t��a�erty tax le� increases will hav� to be a� least 2-3% hi�;her than i�flafiion.