LAND O'LAKES — In 2004, Pasco voters and the School Board struck a bargain.
Voters approved the Penny for Pasco, a 1-cent sales tax increase to build schools, roads and other projects. In return, the School Board cut its property tax rate for construction from 2 mills to 1.5 mills for the next decade, a savings of 50 cents in tax for every $1,000 in taxable property.
A tax cut for a tax increase.
But a wrinkle emerged in the deal this year, as lawmakers decided to give property tax relief to residents statewide. The state lowered the ceiling on that construction tax from 2 mills to 1.75 mills.
What does that mean for the Penny for Pasco bargain?
In May, school superintendent Heather Fiorentino told the Times that voters approved the Penny on the promise of a half-mill property tax cut. Those savings, she said then, should come on top of any state-mandated cuts.
"You told the people, 'Give me a penny,' " said Fiorentino, who became superintendent after the Penny was approved. "And if you look at the revenue, that has gone down, too. But you have given the people your word."
At a budget workshop Tuesday, however, Fiorentino and other officials agreed to keep the tax rate at 1.5 mills.
Cutting another 0.25 mills would take $7-million out of next year's estimated $90.8-million capital fund. The fund is already expected to lose $43-million next year due to cuts in state funds for class size reduction and tax shortfalls caused by a poor economy.
"I don't think there's any doubt we need the money," board member Marge Whaley said Tuesday.
Assistant superintendent Ray Gadd, who spearheaded the district's campaign for the Penny four years ago, said the School Board is living up to its agreement with voters.
Fiorentino could not be reached after the workshop Tuesday. Her secretary said she had previously misunderstood the tax-cut promise made by the board.
But Ann Bunting, who led the campaign against the Penny, said the board should reconsider. The message from state lawmakers is loud and clear, she said. "They're sending a message that we want you to keep taxes down," Bunting said. "And in that respect, it should be a message to our School Board to re-evaluate its budget and strongly consider it."
School Board member Allen Altman, who campaigned for the Penny, said Pasco residents since 2004 have paid lower school construction taxes than people in most other Florida counties.
With state-mandated increases, residents' property taxes for schools will rise next year by 13 cents per $1,000 of property value. The owner of a $200,000 house with a $25,000 homestead exemption would pay $22.75 more. Board members will discuss the proposed budget at their July 29 meeting.
Times staff writer Jeffrey S. Solochek contributed to this report. Nomaan Merchant can be reached at [email protected] or (727) 869-6244.