Clear Lake Shores City Council in late September approved its fiscal year 2018-19 budget, which includes a $200,000 deficit and raises for the city’s 19 employees.

“The biggest thing on the budget is we gave the city employees a 5 percent raise across the board,” Mayor Mike McNamara said in an inteview with Community Impact Newspaper on Tuesday.

The idea to give city employees raises came from the Clear Lake Shores City Council, not staff, he said.

“We have very good employees, and we want to take care of them,” McNamara said.

The total budget is about $4.5 million, which includes $3.08 million budgeted for the general fund. The city budgeted $2.5 million in general fund revenue for the FY 2017-18 budget but ended up bringing in $3.1 million, resulting in the city budgeting more this year, McNamara said.

Clear Lake Shores residents do not pay property taxes. The city gets most of its revenue from sales tax and eliminated its property tax around the time a Home Depot and Target were built in Clear Lake Shores, McNamara said.

“The last 10-12 years we’ve had enough sales tax revenue to pay the bills, so we did away with the property tax,” he said.

Still, the lack of property tax revenue and increased pay for city employees resulted in a $200,000 shortfall. The city expects to make up the deficit with greater-than-budgeted sales tax revenue, McNamara said.

“What we do is we understate our revenue significantly because we don’t have property tax,” he said. “Most of our revenue is from sales tax, so there’s some uncertainty about it.”