By Preston Knight -- Daily Staff Writer

MT. JACKSON — The elimination and reduction of some state revenue and increasing fuel costs will lead to two tax increases for residents in 2008-09, according to the Town Council's proposed budget.

The $8.87 million proposal — $7.16 million in the water and sewer enterprise fund and $1.71 million in the general fund — includes a 2-cent increase in real estate taxes and a 5-cent boost in personal property taxes. That is in addition to a 15 percent increase in water and sewer rates, which, based on a decision made last year, will be the norm until fiscal 2013 to maintain the utility fund balance.

"While the current budget is slightly smaller than last year, the reductions in state shared revenues and some local revenues, combined with significant cost increases in fuels, have resulted in the need to make small increases in some local revenues just to achieve a budget that is smaller than the preceding year," Town Manager Charlie Moore wrote in a memo to council members.

The current budget has a general fund that is $1,300 less than what is proposed for next year, Moore states. The enterprise fund is actually more than $5 million less because of lower costs associated with a project to stem inflow and infiltration into the sewer system and expansion of the wastewater treatment facility. Annual payments on bonds for the two projects will start next year, and will be $325,000 a year, Councilman Rod Shepherd said.

The Town Council voted Tuesday to hold a public hearing on the budget at 7 p.m. on May 27. It is scheduled to adopt the spending plan June 10.

The real estate tax is currently 13 cents per $100 of assessed value, a decline from 25 cents in 1985, Moore states in the memo. The 2-cent boost will result in an average of $18 more for a homeowner to pay next year, Shepherd said at the meeting.

"It breaks my heart we had to raise the real estate rate 2 cents," he said.

The 5-cent increase in personal property taxes to 80 cents per $100 in assessed value would add about $7 for the year per vehicle for residents, Shepherd said. That amount includes a return to the normal vehicle license tax to $25 per year, Moore states.

Meanwhile, water rates for a minimum monthly usage of 3,000 gallons will be $13.47 and sewer rates for the same usage will jump to $16.68 in 2008-09. Officials last year chose a gradual rate increase instead of a single large one after receiving public input and meeting several times to review numbers.

Shepherd said Wednesday that the town's staff has worked hard to keep everything economical in light of General Assembly cuts — including the local share of ABC sales, which is $2,600 — and the increase in petroleum costs.

"I think the citizens of Mt. Jackson see that," Shepherd said. "I think they are getting good value."

For a copy of the proposed budget, visit the town office.

* Contact Preston Knight at pknight@nvdaily.com