South Tucson has set a public hearing on the city’s budget for Wednesday evening.

The $10.2 million draft budget lays out several major changes to tax and fee rates for the fiscal year that begins July 1.

The City Council is expected to vote on a final version during Wednesday’s meeting, set for 6 p.m.

According to the draft, the city’s secondary property tax will be eliminated because it was enacted without voters’ approval.

That change is expected to save the owner of an $89,000 home about $242 a year, but also leave a hole in the budget of about $600,000 to be filled through raising other fees and taxes.

The hotel and motel occupancy tax would rise from 4.5 percent to 8 percent, and taxes on other industries would increase 2 percentage points.

Business license fees would rise, and fees on rental properties would be restructured to correspond with the number of rental units.

One exception to the increases is the tax on food for home consumption, which would decrease from 2.5 percent to 1.5 percent after a request from the owners of Food City.

No city employees would be laid off, and some public works employees would see a pay raise of $1 an hour.

The amount set aside for contingencies is less than 2 percent of the city’s revenues. Municipal finance experts recommend reserves of at least 5 percent.

Contact reporter Carli Brosseau at or 573-4197. On Twitter: @carlibrosseau.