CLEARWATER — The City Council unanimously signed off on a proposed property tax rate increase, but some members said they expect to lower the bump during the next few months.
Council members acknowledged they would have to cut another $2.7-million from the proposed fiscal year 2008-09 general fund if they don't approve City Manager Bill Horne's proposed increase. But, they said, it's a possibility they're going to look into. The proposed fund stands at $123-million, the same as this year.
"I know it's going to be difficult," Mayor Frank Hibbard said during Thursday night's meeting. "And if we don't make the changes now that we have to make, then next year it will be more difficult."
Hibbard said residents can expect more services to get cut, although he wasn't specific, other than to say they would be spread throughout the city.
The main reason the council approved bumping the rate from its current 4.6777 mills to Horne's suggested 4.955 mills is that it can always lower the number later.
A mill equals $1 in taxes for every $1,000 of assessed, nonexempt property value.
Still, city leaders pointed out that most homesteaded properties would end up paying lower city taxes than they did this year.
That's because assessed values are down, thanks to the slumping real estate market and bigger homestead exemptions created by Amendment 1.
For example, in 2007 the owner of a home with a taxable value of $150,000 — the city's average — paid $701 in city taxes.
In November, even with the higher tax rate, that homeowner would pay an estimated $683 in city taxes.
City officials say a home with a taxable value of $300,000 would probably have the same city taxes this year, and that homes worth more would probably pay higher city taxes.
The higher rate would bring in less money than this year.
The current rate brings in $50.1-million. Horne's proposed rate would bring in $48.5-million for the upcoming year. To offset some of the loss, the Parks and Recreation Department would increase fees for sports tournaments and camps. It also would cost more to get a play pass, which provides discounts on camps and access to city pools.
The general fund relies heavily on tax money to pay for things like public safety and parks, and so far the city manager has cut at least $3.2-million from his proposed budget, including the equivalent of more than 11 full-time positions, police and fire department overtime and hours at aquatic centers.
"I'll support (the proposed increase) as a cap, but that's not where I'll be later on," said council member Paul Gibson, suggesting more cuts were imminent.
Vice Mayor George Cretekos, however, said that at this point the city needs the flexibility to deal with increases in oil and energy prices.
Council members John Doran and Carlen Petersen also were a little wary of further cuts, saying the increase would soften the blow to city services.
Four residents spoke about the increase during the meeting, with three supporting it.
"I love the library and I use it tremendously," said Liz Drayer, a member of the library advisory board. She said she was fearful that library hours would be the first thing to go if further cuts were made.
Another resident suggested that because of the poor economy, people are flocking to the libraries to use computers to look for jobs, participate in enrichment programs and have something to do, since they're skipping vacations.
But Joe Paige, 51, said the "government has been playing a shell game" with tax money and said the city should "spend down the reserves."
"If I was your boss and you came to me with a millage increase I'd probably fire you," he told council members.