No property or franchise tax increase is included in the proposed 1989-90 budget submitted Tuesday to the Centerville City Council, but an increase has not been ruled out.

Mayor Dean Argyle told the council the budget anticipates a 1 percent overall increase in general-fund revenues, from $1.97 million to $1.99 million for the next year.Growth will increase the amount of property tax the city collects and the franchise tax, enacted last year, will be collected for 12 instead of nine months in the next budget year, the mayor said.

Although the city will collect a higher percentage of sales tax under a new state formula, the city's overall sales tax revenue is predicted to decline because of the closing of a sporting goods store and discount drug store this year, Argyle said.

An accounting change will also skew the revenue figures, according to the mayor. The city is going to an automated garbage-collection system on July 1 and will set up an enterprise fund to operate the system.

Argyle said if the $180,000 being transferred from the general fund to the garbage fund was left in the city's budget, the revenue increase would be 8.7 percent instead of only 1 percent.

"Combined property tax revenue is estimated to increase next year by 6.9 percent over the current year budget estimate," the mayor said. "This increase of $30,000 is based upon the assumption that another 80 to 90 new homes will be built next year and actual property tax receipts will continue to exceed county projections."

Council members briefly discussed a property tax increase but appeared split on whether Centerville residents would support a hike.

Councilman Doug Nielsen said funding for some areas, such as road maintenance and repair, is "woefully inadequate." Failure to keep the city's roads up will mean more expensive replacement, rather than repair, in the future, he said.

Nielsen said an analysis of property taxes shows that after subtracting the portions that go to the school district, county and other entities, the average Centerville property owner pays about $10 a month in property tax to the city, an amount Nielsen said is a bargain.

"I think if we explain that, go to the people, support could be mustered to increase that," Nielsen said.

Some other council members disagreed, pointing out while property taxes may average $10 monthly, residents also pay franchise taxes on their utility bills and separate fees for water and garbage service.

In his budget message, Argyle is proposing adding 3.5 city employees to full-time positions in the police, water and road departments and boosting a part-time position in the city office to full time.

The mayor also recommended the city pay a 27 percent increase in health insurance benefits for its employees and that $10,000 be set aside for salary adjustments to be made after a survey of city pay levels.

Argyle also recommended that construction start next spring on a new $500,000 maintenance facility for the city and that a more aggressive effort be made to sell the current city hall complex and acreage.