Swimming pools and libraries will not be closed, but Lincolnites will be asked to pay higher taxes for their phones, more money for natural gas, higher water and sewer rates and higher fees for park programs to help fund the municipal budget proposed by the mayor.

Mayor Chris Beutler's $135 million budget spends just $63,624 more than the current budget and does not call for a property tax increase. Beutler said he feels better about this budget than the previous two he has assembled since taking office in 2007. He says the city is slowly addressing the budget's structural imbalance despite the "wicked slider" thrown by the economy lately.

"We're getting to good times," he said. "We're going to be in good shape shortly down the road."

Faced with City Council members who have promised not to raise property taxes, the mayor instead proposes to increase the occupation tax on telecommunications from 5.5 to 6 percent, generating nearly $386,000 in extra revenue.

Beutler's budget would also raise the natural gas franchise fee by 10 percent, as allowed in the franchise agreement. The fee, which would likely be passed on to consumers, would generate $222,000 in revenue. City officials say the fee hasn't been increased since 1998.

City officials estimate the telecom tax increase and natural gas fee increases would cost the average Lincoln homeowner $10 to $12 annually.

Beutler is looking for other revenue sources as the city grapples with a slowdown in the city's top two money-makers. Sales tax revenue is expected to come in more than 2 percent lower than the current year, and the city's overall property value is expected to drop - for the first time in decades - by 1.25 percent.

Beutler's budget would leave the city property tax rate - which accounts for just 14 percent of Lincolnites' total property tax bill - unchanged at 28 cents per $100 of property value. Some Republicans on the City Council have said unless the levy is lowered, the city is effectively raising property taxes because it no longer has to pay the county $1.4 million annually to house prisoners. Instead, a new tax levy is helping pay for a new county jail.

And although Beutler has had little opportunity to propose new programs since taking office two years ago due to chronic budget shortfalls, he is proposing a handful of new ideas this year, largely with revenue the city expects as a result of a city audit of two telecommunications companies that found they were not accurately applying the telecom tax.

Beutler would not name the companies and said it's not yet clear how much or when the city might receive payback money. But he wants to use that revenue to create a rainy day fund, establish a trust fund that would be matched with private donations to maintain Lincoln's "icons" such as Sunken Gardens, and help pay for a new development services center at city hall.

His budget can be altered by the Lincoln City Council during meetings later this summer. The council votes on tentative budget changes July 20 and final changes Aug. 12.

Republican Councilman Jon Camp said he will be looking at Beutler's cuts, increases, transfers and use of one-time funds, and noted that the budget doesn't cut StarTran or libraries. He said the telecom tax will likely be controversial, and he considers it an indirect property tax.

Republicans on the council are also likely to oppose Beutler's proposal to use $6.5 million from the Special Assessment Revolving Fund. They and some business groups have said the money should be spent on infrastructure.

"I want to make sure we're not taxing just to keep spending," Camp said.

But the mayor now has four fellow Democrats in control of the council and said the city "needs the revenues" he proposes.

"We can fight our way out of this," he said.

Reach Deena Winter at 473-2642 or dwinter@journalstar.com.