With the City of Ketchikan facing increased bond debt for its new library and fire station, managers have recommended increasing the city’s property tax by a full mill.

One mill equals one dollar for every $1,000 of assessed value. If the Ketchikan City Council accepts the proposed property tax increase, a resident with a $200,000 home would pay $200 more annually.

The city’s 2013 budget process started Monday, and City Mayor Lew Williams III says that taxes will be the big issue.

“The main focus of the budget is going to be the property tax increase scheduled by the city manager,” he said. “Over the last several years, Council members have been working for limiting the increase in property tax. Over 20 years, we’ve raised it a tenth (of a mill).”

Times have changed, though, and Williams says that some kind of property tax increase might be needed.

The new Ketchikan Public Library is seen before book shelves were moved in. The library and fire station have been cited as two reasons for a proposed property tax increase.

“They’ve added two major debts with the library and the (fire station), which were needed and the public voted for, so with their support, I can see maybe raising the property tax somewhat, but doing a full mill I don’t agree with,” he said. “So we can be looking at other things, and other things are spending, and how we can reduce spending so we can cut that projected mill increase.”

He says he would like to cut the mill increase by half. Potential spending cuts Williams mentioned include jobs and equipment. He says using more of the city’s reserves also is possible, but those reserves already have been drawn down.

The $84.3-million spending plan is about $6.8 million more than 2012. City Manager Karl Amylon says that includes $5.87 million from the city’s reserves.

Williams says the city’s recent trend of challenging budgets continues this year.

“Each year in the last few years has gotten a little tougher, and this one’s going to also be the same,” he said. “If we’re going to hold the line on limiting taxation as much as possible, it’s going to be a tough budget.”

In his transmittal letter to the Council, Amylon notes that the budget was based on a list of assumptions. They include the property tax increase, no reductions in services or city staff, a 10-percent increase in health insurance, no cost-of-living raises, and a 2 percent increase in sales tax revenue.

The budget also includes a 10 percent increase in the city’s wastewater fee. That rate has gone up 5 percent annually since 2010.

In addition to Monday’s meeting, budget sessions are scheduled for Thursday, and throughout the month of December.

All budget meetings start at 7 p.m. in City Council chambers, with time for public comment at the start of each.