Chatham Area Transit staff is recommending a property tax increase as part of its budget recommendation for the next fiscal year, which begins July 1.
The 44 percent increase to a 1.24 millage rate would amount to a tax increase of about 85 cents a month for the owner of a $100,000 home, according to Executive Director Chadwick Reese.
Reese said the increase would generate an additional $3.2 million in tax revenue and is necessary to replace the loss of federal operating assistance and to pay down debt that was accumulated as a result of the board’s decision to lower the tax rate several years ago.
Board member Priscilla Thomas said the tax cuts, which she had opposed, were a mistake.
“We are now feeling the negative effects of what occurred,” Thomas said.
The last increase was improved in 2011. If the current proposal is approved, the tax rate would be the highest it has been since 1992, when there was a 1.3 millage rate.
Chairman Pete Liakakis said the proposed increase is a small price to pay to help the thousands of people who rely on the service for their transportation needs.
“This bus system is very important to people in our community, and we have to do whatever we can,” Liakakis said.
The proposed fiscal year operating budget amounts to about $19.8 million, an increase over the current year of about $1.6 million that is attributed to the debt payments.
Operations costs will decrease by about $522,093 as a result of the board’s decision last month to end its contract with Veolia Transportation and eliminate the management fee, according to the budget report.
The CAT board held the first of two planned public hearings regarding the budget on Tuesday. The second hearing is expected to take place during the board’s next regular meeting on May 21.
IF YOU GO
What: Chatham Area Transit Authority public hearing
When: 11 a.m. May 21
Where: Old Courthouse Building, 124 Bull St.