Officials made public a City Hall budget plan for 2005 that would likely mean bigger tax bills for most Lawrence property owners, though the property tax rate would decrease.

“We’re not calling it a tax decrease,” City Manager Mike Wildgen said Thursday, as officials unveiled a proposed $122 million 2005 city budget. “We’re calling it a mill levy decrease. There is a difference.”

The difference, under the proposed budget, is a 0.163-mill decrease, from 28.065 mills in 2004 to 27.902 mills next year. A mill is $1 in tax for every $1,000 of assessed valuation.

But city officials are assuming that property valuations will rise by an average of 6 percent this year. That means, for example, that a house valued at $150,000 in 2003 would increase to $159,000 this year.

Even with the mill levy decrease, then, the city portion of that home’s property tax bill would rise from $484 to $510 this year. The city’s levy rose 2.49 to fund this year’s budget.

“The assessed value of your home has likely risen,” Wildgen said. “You may see an increase.”

The proposal is a $12 million increase, about 11 percent, over the $110 million budget in 2004. It includes:

• A $4 million increase in salaries and benefits for the city’s more than 700 employees, from $44 million to $48 million. Employees did not receive a cost-of-living raise in 2004.
• A nearly $1.2 million increase in capital expenditures, mostly equipment, from $2.8 million to $4 million.
• And a $2 million increase in debt payments, from nearly $16 million to $18 million.

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Also included in the budget: A $47,500 grant to Downtown Lawrence Inc. — despite an earlier recommendation from Commissioners Sue Hack and Boog Highberger that no money go to the organization.

Maria Martin, director of Downtown Lawrence, was unavailable for comment.

In a letter to the Lawrence City Commission, Wildgen indicated City Hall was in better budget shape than it had been in recent years.

“Our local economy is starting to show signs of a moderate rate of growth in sales tax receipts,” Wildgen wrote, “and predictions have surfaced for an increase in interest rates, both positive revenue impacts for the 2005 budget if projections are accurate.”

City commissioners will discuss the proposed budget at a special study session, at 8 a.m. Wednesday in City Hall, Sixth and Massachusetts streets. They’ll continue budget discussions during a series of meetings up to a public hearing on Aug. 10.