LARGO — On July 1, City Manager Mac Craig released a proposed budget for fiscal 2013 calling for a 5 percent increase in the city's property tax rate.
Last week, Craig gave city commissioners a message: It's not enough.
The commissioners had just finished watching a budget presentation Tuesday night by Amy Davis, manager of Largo's office of management and budget. Davis showed them how, if they approved the 5 percent hike, they'd still need to find $900,000 to cut next year for the 2014 budget.
When Davis finished her presentation, Craig told commissioners he wanted them to approve a tax rate of 4.9999 mills, a 9.7 percent rate increase.
"I recommend very strongly to the commission that you consider that 4.9999 millage rate and help get us out of this," Craig said. "We are down to the bone, and anything less than that is going to hurt us in '14."
One mill is equal to $1 of tax for each $1,000 of assessed, nonexempt property. The owner of a home valued at $100,000 after any exemptions, for example, paid Largo about $456 in property taxes under the current millage rate of 4.5594. That same homeowner would pay about $500 under Craig's requested tax rate.
Property values dropped 2 percent in Largo this year, according to estimates from the Pinellas County Property Appraiser's Office, and have dropped more than 30 percent since 2008. The city has cut more than 80 full-time equivalent positions since 2008 — 23 this year — to deal with plummeting income.
The cuts have allowed commissioners to avoid drastic tax increases since 2008. But Craig says the city has reached the point where cutting more would seriously affect services. And commissioners agreed Tuesday night.
"I think we need to do it to get out of the hole," said Commissioner Gigi Arntzen after the meeting. "I think we've exhausted all avenues."
The proposed tax hike would bring in $15.4 million, according to city estimates — more than $1 million more than in the current year. That is not likely to sit well with Commissioner Curtis Holmes, a frequent critic of spending by city administrators. Holmes didn't have much to say last week, but said he'll voice his opinion at Tuesday's meeting, when commissioners will vote to set the proposed tax rate for 2013.
"It's going to be a very interesting conversation," Holmes said. "The city manager and yours truly have a fundamental difference of opinion on spending priorities."
The rate set Tuesday will not be the final tax rate. It is the preliminary rate that will go on Truth in Millage notices sent to property owners in late August. Commissioners will vote on the final tax rate and budget twice in September, following public hearings. The fiscal year starts Oct. 1.
Will Hobson can be reached at (727) 445-4167 or [email protected] To write a letter to the editor, go to tampabay.com/letters.