The City Council approved a property tax increase on Monday, as well as a number of other items including the 2012 budget.

The 1 percent increase to property taxes was unanimously approved by the City Council, and will go into effect Jan. 1, 2012.

“An average Bainbridge homeowner, with a home worth about $500,000, pays roughly $5,000 in total property tax for all public agencies,” said council member Barry Peters. “The City’s 12 percent share of that is roughly $600. The one percent property tax modification therefore results in the average homeowner contributing about $6 more to the City next year.”

Peters said that the city has an option every year to raise taxes by either 1 percent, or by the rate of inflation — which ever is least. He feels this is not enough. Many costs that the city faces are rising faster than inflation such as petroleum-based road resurfacing materials or medical insurance costs for employees who deliver city services.

Peters cited a 2001 Tim Eyman ballot measure (Initiative 747) that restricted cities from raising property taxes more than one percent.

“Under the Eyman measure, the City’s property tax revenue can’t even keep up with inflation,” Peters said. “…the regional inflation rate for the past 12 months was 3.8 percent.”

He further noted that the 1 percent raise is significantly small when compared to other recent voter-approved tax increases such as the bond measure for the reconstruction of Wilkes School, or almost doubling the tax rate for EMT services.

The city’s 2012 budget was also passed by a 4-0 vote — with two council members not present and one, Debbi Lester, abstaining.

“I abstained because although the administration had $1.5 million in reductions, they had $2 million in increases,” Lester said. “And another part that concerned me were those increases were primarily staff and professional service increases.”

Lester also noted that all council members were not present to vote and she felt they should be on matters such as the budget.

During discussion over the budget, council member Hilary Franz proposed an idea to help solve an lingering issue regarding permit fees for the current road ends project. The volunteer Road Ends Committee hasn’t been able to do any work on various road ends spanning the island due to permit fees the city is legally required to charge.

Franz proposed that the city use interest earned from the $2 million the city received from a settlement with the Washington State Ferries to pay for the permits. Her proposal was approved by a 3-2 vote.