Dublin is facing the same problems it was a year ago - and is so far taking a similar approach to bridging huge budget shortfalls by proposing large tax increases and searching desperately for additional cuts in virtually every department.

On Monday, the city council proposed raising taxes to offset a $210,000 budget deficit that needs much more than tax hikes to balance.

The council proposed the largest tax increase allowable by setting the proposed tax rate at $1.1384 per $100 of property value, a 4.83 percent increase from 2011.

Last year, the council adopted the biggest tax hike possible raising the rate from $0.99 to $1.0883 per hundred valuation, but the city still expects to come up more than half a million dollars short this year. The city currently expects to end the year with $532,362 in overruns and non budgeted expenses when the fiscal year ends Sept. 30. Anything over budget must be covered by reserve savings or next year's budget, which could create a deficit up to about $750,000.

The city had already reduced all department budgets by 3 percent, funding only critical programs and services with little room for additional cuts.

The council took no official action apart from the proposed tax rate, but told city staff to "nitpick" every line item and cut everything nonessential to basic functions.

"You need to find everything you can to cut and cut it out of the budget," Councilman Mike Hicks said.

Council members barely muttered "layoffs" as a way to reduce expenses, while employees refused to even say the word. Department heads left City Hall frustrated after being told to dig even deeper.

The city work force is already operating with a skeletal crew since the last time the council laid off employees two years ago. Since then, the police force has struggled with providing 24-hour patrol, nearly all public works employees have been on-call around the clock, and workers at City Hall have increased responsibilities.

The city is also considering raising water, sewer and trash collection rates substantially to increase revenue.

The large deficit puts council members who oppose tax and rate increases in a catch-22.

"If we raise taxes like this we will drive everyone out of Dublin," said Kenneth Lunsford. "There has to be something else we can do, but I don't know what."

A primary concern is that senior citizens and others on fixed incomes will not be able to afford to live in Dublin after the rate increases.

The city council will host more budget workshops before adopting the final tax rate and budget by Sept. 30.

Raising taxes appears to be Dublin's only option, but the council agrees that won't be enough to cover even the most basic, scaled-back operations of the city.

"We can't cut out $210,000 no matter what we do," said Mayor Pro Tem Tommy Sperry. "That's a lot of money."