City Manager Bill Horne is proposing to raise the property tax rate for Clearwater residents, a dramatic turnaround from the cuts of the past two years.
The move would mean the city could bring in close to an estimated $440,000 in additional property tax revenues, but it still won't be enough to save a number of city jobs and services.
It also means residents could pay higher property taxes, despite property values dropping countywide this year.
Horne said he's proposing to roll the millage rate forward from its current rate of $4.677 per $1,000 of taxable value to $5.1.
Even with the increase, the city won't collect as much money as it did this year because sales tax and franchise fee revenues are down. In addition, the Pinellas County Sheriff's Office is expected to raise fees — something city leaders didn't anticipate — for a number of contracts, such as forensics.
"I'll be recommending it because there are some unknowns," Horne said. "We have to pass a millage rate that gives us some room to protect our services."
The City Council, however, ultimately will have to sign off on the plan. And even though those who spoke with the St. Petersburg Times on Wednesday said they haven't seen the proposal, they voiced skepticism. It would need approval by a majority of the five-member council to pass.
"Obviously on Jan. 29, the people voted for a tax reduction," Mayor Frank Hibbard said, referring to Amendment 1, which gave homeowners tax breaks and placed new limits on local governments.
Amendment 1 created an additional homestead exemption of $25,000 for local but not school taxes. It also made some benefits of the Save Our Homes cap portable and struck many tangible personal property accounts from tax rolls.
Vice Mayor George Cretekos said he's also reluctant to raise taxes. "I think everything is on the table, but at this point we shouldn't do that as a first step by any stretch of the imagination," Cretekos said.
The city is currently projecting revenues of $47.27-million for this year. Keeping the property tax rate flat would bring in $43.54-million next year. Raising it to $5.1 per $1,000 of taxable value would bring in $47.71-million.
The city is also considering major spending cuts.
Earlier this year, the city divided the proposed reductions into three tiers. City budget director Tina Wilson and Horne said all of tier one and at least some of tier two will go.
The first two tiers, which represent $5.8-million in cuts, include eliminating police and fire department overtime pay, increasing camp and sports tournament charges, reducing travel and training, cutting landscaping duties, the Jolley Trolley Beach transit bus and recreation and library hours.
These tiers combined eliminate the equivalent of roughly 48 full-time jobs.
The city's general fund, which covers most of the city's day-to-day operations, stands at $123.2-million with property tax revenues making up 38 percent. The rest comes from a number of areas, including fines, fees and sales tax.
If the city were to raise property tax rates, it's hard to say just how much more — or less — residents would pay in city taxes. Although Clearwater property values on average fell an estimated 7.8 percent from last year, the drops vary from street to street and neighborhood to neighborhood, so individuals will see different effects.
Additionally, the Save Our Home cap allows a 3 percent increase in tax assessment, even if a home's market value falls.
The City Council will get Horne's proposed budget around the end of June, and it has to be approved by Sept. 30, the last day of the current fiscal year.
The city is expected to set a preliminary property tax rate on July 17 and hold a final hearing Sept. 18.
Mike Donila can be reached at
[email protected] or (727) 445-4160.