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South Pasadena raises tax rate, trims deficit

(ran Beach edition)

The city has raised taxes and shaved its budget, part of a plan to meet rising health care costs and ease worries about police protection.

On Monday, commissioners raised the tax rate from 1.5409 to 1.7655 mills, or about $1.77 of tax for every $1,000 of taxable property value.

While the higher tax rate will help address the budget shortfall, the city still will have to take $290,000 from its reserve fund to balance the budget for the next fiscal year, which begins Friday.

A mill is equivalent to $1 of tax for each $1,000 of taxable property. A homeowner whose property is worth $300,000, and who has a $25,000 homestead exemption, will pay $485 in taxes; up from $424.

"We really have to have a little kitty where if something happened, we would not have to go to the bond market and be in debt for the next 30 to 40 years," Commissioner Robert Daugherty said.

The city sets aside its $3.5-million reserve fund for emergencies, with the idea that the money could last for up to one year. "After what has happened in the last six weeks, you can see that $3-million would not go far," Commissioner Leon Montalbalm said.

The tax hike also will make room for a 16 percent rise in employee health care costs, and increases in salaries and pension benefits.

The city has renegotiated its law enforcement contract with the Sheriff's Office.

The city retained two deputies alternating 12-hour shifts, seven days a week, while paying $160,000 less than the Sheriff's Office had proposed.