The Annapolis City Council adopted a $96.5 million operating budget early Tuesday morning that lays off seven employees, increases a tax on businesses and increases some parking fines.

The budget also eliminates the Annapolis Economic Development Corp., which was created in 2010 to attract and promote businesses in the city. The agency's funding, which was $450,000 this year, will run out at the end of the month as the fiscal year ends.

Businesses could pay up to $150 more per year due to a 17 percent increase in the personal property tax, which is a tax on equipment and merchandise that's paid by all businesses, according to Brian Woodward, acting city manager. Some businesses will pay an increase of as little as a few dollars. All told, the increased tax rate will bring in about $500,000 to city coffers, Woodward said.

The city also will raise money from a variety of increased fees, including parking fines and weekend docking fees at City Dock. Taxi drivers will pay more to be registered and inspected, a move that will save the job of a transportation inspector who was targeted for layoffs.

Seven city employees will lose their jobs and 23 vacant positions will be eliminated, Woodward said.

Annapolis homeowners will see a slight reduction in their property tax rate, from 65 cents per $100 of assessed value to 64.9 cents. The trash fee also will be decreased to reflect savings from a switch from twice-weekly trash collection to weekly trash collection, Woodward said.

The mayor and aldermen have not yet voted on the capital budget, which pays for construction projects. They decided not to issue any new bonds in the next fiscal year, which starts July 1.

On Thursday, the mayor and aldermen will hold a work session to discuss how they can continue to fund construction projects through grants and current year spending without issuing new bonds, Woodward said.

The city's capital budget plan includes $10.3 million worth of projects through 2019.

The vote on the capital budget is scheduled for 7 p.m. Monday at City Hall, 160 Duke of Gloucester St.

pwood@baltsun.com

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