In marathon meeting, Tampa City Council further trims Bob Buckhorn’s property tax increase
It wasn’t easy, quick or pretty, but the Tampa City Council voted early Friday morning to make another reduction to Mayor Bob Buckhorn’s proposed property tax increase for 2018.
As a result, Tampa’s property tax rate will rise next year from $5.73 to $6.21 in city taxes for every $1,000 in assessed, taxable property value. That's 14.7 percent above the state's "rollback" rate, which is the rate the city would have to set to account for the growth in property values and to take in the same amount of property tax revenue next year as this year.
That means a homeowner whose house is assessed at the city average of $166,579 and has a homestead exemption will pay about $91 more next year. The average home in South Tampa, where values are highest, would pay an estimated $174 more a year.
To make the new tax rate work, the $969.2 million budget will not carry forward $2.1 million that had been earmarked to help cover debt payments that are expected to shoot up over the next six years. The city also will cut $1.1 million from the increased spending that Buckhorn had proposed for the parks, transportation and facilities maintenance departments.
Buckhorn’s original tax increase equalled 9/10ths of a mill, or 90 cents in taxes for every $1,000 of taxable value — the city’s first increase to the millage rate in 29 years.
At a first public hearing last week, the council voted 4-3 to cut that increase to .6 of a mill.
On Thursday night, council chairwoman Yvonne Yolie Capin changed her vote, voting against the .6 mill increase. Over the course of the next five hours, council members considered about a half-dozen different potential tax rate increases, from no increase to .52 of a mill. At times, the council deadlocked on proposals with impacts that varied by less than $1 a month for the typical homeowner.
Shortly after midnight, Harry Cohen, Frank Reddick, Charlie Miranda, Luis Viera and Capin settled on an increase of .475 mill.
"I want to thank those council members who worked to find a budget solution that allows us to move forward,” Buckhorn said in a statement emailed at 12:41 a.m. “This year, like the previous six, has presented a challenging set of financial circumstances and a recognition of how long and deep the effects of this recession have been. We will continue to look for opportunities to cut costs and reduce expenditures as we have done every year for the last six years.”
Buckhorn said the budget as adopted “preserves our public safety priorities while enhancing our parks and recreation programs to keep our children and seniors active and safe, while also helping to stabilize our path forward financially."
Council members Mike Suarez and Guido Maniscalco wanted to cut further, enough to keep the same tax rate as this year (though even at that rate, many taxpayers would see their bills rise because property values have grown).
The council’s vote came after a public hearing where several dozen people supported a gymnastics center expansion in New Tampa, a park improvement in West Tampa and the restoration of city funds to nonprofit arts and education and public access television. (The parks made it into the final budget; the money for the TV stations did not.)
But, unlike at a first public hearing earlier this month, opponents of the tax increase showed up, too.
Former City Council member Rudy Fernandez said a tax increase would hit hardest for renters, people in more expensive homes and those who might consider moving here in the future.
Greater Tampa Chamber of Commerce chairman-elect Steven Bernstein said the chamber opposed the tax increase, saying it would “profoundly affect every single” business the chamber represents. He said the chamber questions whether it was “truly a measure of last resort” and urged the city to find a “fiscally responsible solution that holds the line.”
Since Buckhorn proposed his budget in July, several council members have criticized him for asking them last year to approve a $35.5 million redevelopment of Julian B. Lane Riverfront Park without telling them about two big debts that will soon come due at City Hall.
“The real bottom line issue is the way this business came about,” Capin said. “We couldn’t deal with the debt (sooner) if we didn’t know what we had, and that is something that is something that is just gnawing at me.”
One was a $6 million federal loan taken out in the mid 1990s to help develop Centro Ybor. The other was a bond issue from 1996 in which the city borrowed $24 million to buy and renovate a bank building to serve as a new police headquarters, build two police substations and buy fire engines and emergency equipment.
Because the city put off repaying those bonds for two decades and made refinancing the bonds at lower interest rates next to impossible, the city is looking at several years of repayments totalling $13.6 million a year starting in 2019. Over the next six years, those two debts together will force the city to find about $54 million more in spending.
Suarez wanted to target proposed personnel increases in departments other than the Police Department and Tampa Fire Rescue to reduce the size of the proposed budget increase.
“I suggest we cut more out of the budget to get where we pay down some of this debt and are not just adding spending,” he said.
Once council members heard about those debts this summer, several said they never would have let Buckhorn use $15 million of Tampa’s $20 million settlement with BP to help pay for Riverfront Park. They suggested instead that they might have demanded that the BP money be used to help retire the debt — something that Buckhorn has said would cover a little more than one year of the debt payment, while he sees Riverfront Park as the biggest city investment ever in West Tampa and believes it could help propel the redevelopment of the West River area.
Buckhorn also has said the additional property tax revenue is needed to:
• Expand fire service, particularly in New Tampa, where the city is building a new fire station on Trout Creek Drive.
• Improve parks, including the New Tampa Community Park Center and Vila Brothers Park, and to hire new parks employees for Julian B. Lane Riverfront Park, which is scheduled to open in the spring.
• Not only pay off the debts from the 1990s, but prepare the city for the $6 million hit it will take starting in 2020 if voters next year pass a referendum to double Florida’s homestead exemption.
Council members who supported the tax increase said they didn't like the situation, but said the city couldn't do nothing.
"If some of this is not addressed in this budget, then next year will be even worse,” council member Charlie Miranda said.
And indeed, with no money being carried forward to help cushion the blow in future years, city finance officials say an even bigger tax increase of .56 mills may be needed to close a revenue shortfall of nearly $13.6 million in 2019.
But Cohen said he was frustrated that he has not been able to get more feedback from Buckhorn’s administration on what spending could get cut.
“I think in a budget this size, there is some room for belt-tightening,” Cohen said. He said he could support some tax increase, but Buckhorn's request was "too much to ask of people in one year.”