The city of Charleston would cut spending by more than $1.3 million next year, reduce employee pay and eliminate raises, and raise the city's franchise fee, under the proposed budget outlined Tuesday night by Mayor Joe Riley.

The city's property tax rate, and business taxes, would not change.

"I felt that a property tax increase this year was not possible, with the circumstances people may find themselves in," Riley said.

Charleston's most recent property tax increases were a 7 percent boost for 2008 and a 5 percent increase in 1999.

The city is making it through the current year by spending part of its undesignated fund balance, cutting travel and other expenses, eliminating raises for higher-paid employees and by leaving some positions unfilled.

Next year -- the city's budget year begins Jan. 1 -- Charleston's budget calls for spending roughly what the city spent in 2008.

Health care and other costs have increased since then, as has the city's public safety budget, and some revenues have declined, posing a challenge to the budget writers.

"We spent six months going through this budget," Chief Financial Officer Steve Bedard told City Council. "We cut everything we could possibly cut."

Charleston's roughly 1,700 employees will see the budget pain reflected in their paychecks. Most employees will not be paid for 5 holidays, department heads will lose 7 paid holidays and the mayor will lose 9 of the 10 paid holidays recognized by the city.

"We picked paid holidays because it has the least effect on our citizens and the services they count upon," Bedard said.

Police officers and firefighters, who are paid differently and work on holidays, will lose roughly the equivalent of two days' pay, he said.

Like other local governments, Charleston is facing a combination of declining revenues, particularly from building permits and business licenses, and cuts in funding from the state and county.

Most of the city's general fund, $74.1 million out of $125.5 million, is spent on police, fire, sanitation and stormwater services. Spending in those areas would increase next year.

"We're making sacrifices, all of us, but with no dismemberment of the entity that's producing services," Riley said.

The city also has a nearly $21.2 million enterprise fund budget that includes parking garages, the city's baseball stadium, the Charleston Visitor Center and other entities. The enterprise fund generates a surplus every year, primarily from the parking garages

Together, the general fund and enterprise fund add up to city spending projected at $146.6 million for 2010.

The budget is being balanced through a "flexible" hiring freeze that's expected to save $2.1 million, the elimination of raises and the employee furloughs worth $1.1 million and the increase in the franchise fee.

The franchise fee is a tax on electric and gas bills. The city's fee would rise to 5 percent from 3 percent, matching Mount Pleasant's current fee.

For a homeowner, the increase amounts to a small monthly charge, an extra $3 on a $150 electric bill, for example. Large consumers of electricity and natural gas, including the many downtown institutions exempt from property tax, like colleges and hospitals, will see a larger impact.

For the city, the fee increase will be worth about $4 million, and Riley said that without it, deep budget cuts in basic services or a property tax increase would be needed.

"Have we thought about selling some of the land the city owns?" Councilman Tim Mallard said.

Pressed for specifics by Riley, Mallard said he'd be willing to sell Stoney Field and the city's baseball stadium.

Riley and Bedard said it would be a bad idea to sell assets to pay for ongoing expenses such as salaries.

Over the coming weeks, City Council will be digging into the two-inch-thick budget plan, looking for options.

City Council will next discuss the budget when it meets on Dec. 8.