NEW PORT RICHEY — City Council members have tentatively approved a 14 percent property tax hike, but due to plunging property values, most city residents are not likely to see a big increase.
On Tuesday, the council set a tentative tax rate of $9.57 per $1,000 of taxable property, up from this year's rate of $8.38. City Finance Director Doug Haag had estimated that a tax rate of $9.43 would be needed next year to balance the budget. The city would need a higher tax rate to bring in the same amount of revenue because New Port Richey's tax base has fallen 11 percent.
"Most people will be seeing some kind of increase, but because of the lower property values, it probably won't be 14 percent," Haag said.
The city is facing a $17 million shortfall over the next five years. Tax revenues are down, and New Port Richey is carrying a heavy debt load on several redevelopment properties purchased during the real estate boom.
City staff recommended setting the tentative tax rate at the maximum $10 per $1,000 in taxable value, which officials could always lower as they hammered out the budget. The approved $9.57 rate was the highest possible rate the council could approve without a super majority vote.
Residents will receive notices advertising the proposed rate as a tax increase.