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Clearwater residents avoid tax rate increase for ninth year in row

 
Clearwater Mayor George Cretekos says the city must be prepared.
Clearwater Mayor George Cretekos says the city must be prepared.
Published July 26, 2017

CLEARWATER — Residents will avoid a rate hike on their property taxes for the ninth year in a row as taxable values continue to recover from recession levels, padding city coffers.

Property taxes are projected to bring in $50.4 million in fiscal year 2017-18, nearly $4 million more than last year, according to budget manager Kayleen Kastel.

The proposed $567 million budget for fiscal year 2018 is 21 percent larger than last year, mostly because the city has planned to spend almost double on capital improvement projects.

The City Council will give final approval to the budget in September, but officials last week set the tentative tax rate at about $5.15 per $1,000 of assessed, taxable value. That means the owner of a home valued at $100,000 after exemptions would pay Clearwater $515 in property taxes. Though the rate is unchanged, the total tax bill for many people will increase due to higher property values.

After setting the tentative rate, elected officials may lower it, but not raise it, during budget discussions.

City Council member Bob Cundiff floated the idea of lowering the tax rate for residents since the status quo will bring in about 2.5 percent more to the general fund than last year. But Mayor George Cretekos cautioned that the city must prepare for unexpected expenses, including unforeseen increases in gas and health care costs.

And if Florida voters next year pass an amendment expanding the homestead exemption, city coffers will surely take a hit with less tax revenue.

"We all want to be able to campaign on 'we reduced tax rates,' but practically speaking, it's much more difficult to do," Cretekos said.

Property tax revenues have increased every year since 2013 following the crash that began in 2008.

The city's budget next year will support 39 new positions, including three in the police department and about 12 in parks and recreation.

The largest capital expense is a $69 million bond for water and sewer improvements, an expense that will be repaid over 30 years, according to finance director Jay Ravins.

The budget includes $3 million for the construction of a recycling processing plant, $5 million for the construction of the Seminole boat launch and the first year of operating costs for the new Morningside Recreation Center.

City Manager Bill Horne said even with tax revenues increasing since 2013, the approach should be to focus on new priorities and needs, not to necessarily restore operations to pre-recession levels.

He called next years budget balanced and "not a lot of drama."

"It's very clear the economy is getting better, and all that does is set you up for the next recession, whenever that may be," Horne said in a recent interview.

Contact Tracey McManus at tmcmanus@tampabay.com or (727) 445-4151. Follow @TroMcManus.