
Photo by Cale Green · Source
The Petersburg Borough Assembly reviewed a proposal that would raise property taxes for all borough residents to cover a 5% increase in expenses.
The borough proposes to add 1.71 mills for area-wide operations to the existing 5-mill education levy. That would bring the total area-wide mill rate to 6.64 mills, or $164 per $100,000 of assessed value. Service Area 1 property owners would see their total mill rate rise to approximately 11.93 mills, an increase of $13 per $100,000 of assessed value.
Finance Director Jody Tow said the borough is allowed to levy the area-wide rate under charter section 1405. The area-wide rate would fund assembly operations, the library, cemetery, hospital, and other services previously paid only by Service Area 1 residents.
Borough Manager Steve Giesbrecht said the proposed approach was reasonable and defensible. He warned that property owners outside Service Area 1 would likely object to the new charges.
Expenses are rising 5% over the current year. A 5% health insurance increase adds roughly $90,000 to the borough's $1.8 million annual health insurance costs. The budget also includes vehicle replacement costs and a 2.5% wage increase, though union negotiations could require a supplemental appropriation later.
Sales tax revenue growth is slowing. The borough collected $26,000 more in sales tax in January than the prior year and $22,000 more in February, but the trend is flattening.
The borough is also reducing its reliance on Secure Rural Schools funding, which provides about $600,000 annually but faces uncertain federal reauthorization. The proposed budget uses $660,000 from that fund, down from $770,000 in the current year.
The assembly will introduce an ordinance at its next meeting Monday to increase the marine passenger fee from $5 to $8 per head. The increase would take effect January 1, 2027, and generate an additional $30,000 annually.
An ordinance to raise the sales tax cap will be introduced at the second meeting in May. In 2025, businesses exempted over $25 million in sales due to the current $1,200 cap.
The budget includes $3.25 million for the local contribution to the school district, the same as the current year. The school district has requested $3.45 million but indicated it could accept the lower amount if the state approves a base student allocation increase.
The assembly will hold a second reading of the budget at its second meeting in May. The third reading is scheduled for June 1.
This article was drafted with AI assistance and reviewed by editors before publishing. Every claim can be verified against the original transcript. If you spot an error, let us know.
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