The Austin City Council will discuss a proposed property tax increase of 4.59 percent for 2010 at a work session Monday evening. City staff says the increase is recommended largely because of the recent cuts to Local Government Aid.

Austin is expected to lose roughly $876,000 in LGA for 2010, and the government aid makes up more than 50 percent of the city’s roughly $14 million operating budget.

What does the proposed tax increase mean to homeowners? Nothing now.

Jim Hurm, city administrator, said the council will discuss the matter in work sessions before deciding whether to raise or lower staff’s recommended increase.

Hurm said that decision — by state law — has to come before Sept. 15.

After Thanksgiving, the county is expected to send out proposed property tax statements, which will estimate the increased amount each homeowner will be responsible for if the increase is approved.

A public hearing will then be held in December, followed by a vote by the council.

The council continues to discuss dozens of cuts for 2010 to go along with cuts made for 2009 and to help offset the cuts in LGA. Hurm added that the proposed tax increase for 2010 would generate $170,000 more for the city.

“If we didn’t make deep, deep cuts, then it would have been much higher,” Hurm said of the proposed increase.

Hurm added that at this point there is no formula to predict what exactly the proposed increase will come out to for homeowners because of various factors.

He did give an estimate, however. Hurm said that out of each tax dollar, based on 2008 numbers, roughly 33 percent is distributed to the City of Austin, with the majority of the rest going to the county (roughly 43 percent) and the schools (roughly 21 percent).

Out of that 33 percent, if this proposed tax increase were approved as is, Hurm said homeowners can expect an increase of 4.59 percent on that 33 percent, adjusted for growth. After growth, Hurm said the final increase for each homeowner, on average, would be between 2 to 3 percent.

Hurm explained it further.

A copy of a proposed property tax statement from last year for a $120,000 homeowner in Mower County showed a total annual proposed 2009 property tax of $1,244. Of that amount, $321.11 would go to the city. Under the proposed 2010 increase, Hurm said, adjusted for growth, the increase this homeowner would face at roughly 3 percent would be roughly $9.60 per year or less than $1 a month.

The property tax has been gradually raised by the city each year since 2004 and was raised by 7.04 percent for 2008 and 6.07 percent in 2009.