Debating a November election issue for residents, the Carnation City Council is considering a 1 percent property tax lid increase to help balance the city’s general fund.

No decision has been made on a levy lid lift, and the conversation so far has been hypothetical.

“We’re going to be doing this for probably every meeting through May,” City Manager Ken Carter told the Record.

If the council decides to put a lid lift on the ballot, it will also need to determine how much the levy will be, and how the revenue will be used. The city has run a general fund deficit since 2008, Carter said, and the council has three spending buckets that it might address with a lid lift, debt, police services, and restoring some of the base services and staff positions cut in the past. Carter said the council will actively solicit public opinion to set spending priorities.

The city’s current property tax rate is $1.29 per $1,000 of assessed value, which will generate $243,000 in revenue for the city this year. A levy lid lift would allow the city to raise its rate more than the 1 percent limit, up to a maximum of $2.10 per $1,000, for one or several years. The revenue generated from a maximum levy is about $395,000. However, voters must approve this increase.

If voters reject a lid lift, the maximum amount the city can increase its levy next year is $1.42 per $1,000, for a revenue of about $267,000.

The city’s annual budget is $1.1 million. For 2011, the city has moved to save on expenses by cutting the hours at City Hall back, reducing or eliminating some parks services, cutting back the hours for some city staffers, and giving Carter, the city manager, a 5 percent pay cut.