The City Council approved a $168 million budget for fiiscal year 2014 on June 27.
CHICOPEE — An expected surplus for next year could mean no new taxes for homeowners and businesses.
Following the City Council’s approval of the $168 million budget for fiscal year 2014, Mayor Michael D. Bissonnette said he is hoping to be able to freeze property taxes, especially for homeowners.
“It is too early to tell. ... What we have seen so far it appears we will have a revenue surplus based on preliminary estimates,” he said. “We will have to wait for the final figures.”
The tax rate is typically set in October.
Even if there is no tax increase, homeowners and businesses may see a change in their tax bills because valuations change year to year, he said.
Bissonnette said he will specifically push for helping homeowners since last year the City Council opted to shift the tax burden more toward homeowners and lessen the increase the businesses would pay.
Last fiscal year, the city raised taxes, but at less than the 2.5 percent allowed under the Proposition 2½ law. At very least, Bissonnette said the city will not have to raise taxes to the 2.5 percent levy limit for 2014.
The current tax rate has residents paying $15.74 in taxes per $1,000 of the value of their property. Businesses pay $31.41 per $1,000.
The council and Bissonnette disagreed back and forth on setting the tax rate last year, with it taking four meetings and a veto for them to come to a final compromise. The rate raised the average homeowner’s bill by $13 and the average business bill by $475.
Last year, Bissonnette also proposed raising taxes by another about $600,000 so the city could purchase a new ambulance and recycling truck. The City Council rejected that proposal, but this spring was able to use surplus money to purchase a variety of equipment including those two items.
With the city’s so-called rainy day or savings account growing, it is unlikely a similar request to raise taxes would come forward.
Earlier this month, the City Council moved $2.2 million from free cash into the stabilization account to bring it up to nearly $11 million. The city is still expecting about $2 million more to be added to the savings, with about half coming from reimbursements from grant funds received for projects that have been done such as improving Szot Park. The other half is to come from the Federal Emergency Management Agency for costs paid on expenses for storms that were later declared emergencies, Bissonnette said.
The city also expects some surplus left over from fiscal year 2013, which ended on June 30. The amount left over will not be certified as free cash to be available for the city until the fall.
While the city could have an ever larger rainy day fund, Bissonnette said it is important to balance the need to make capital improvements, keep the tax rate affordable and save money.