LARGO — Last November, voters approved a referendum allowing their city to offer tax breaks to new and expanding businesses.
Now city leaders are hammering out the details: How generous will the property tax incentives be? How many years will they last? Who will qualify for them?
City officials want to make it clear that they won't be passing out tax breaks like candy.
The property tax exemptions will be only for improvements made to a property by a business that's relocating to Largo or expanding in Largo. The businesses must be in targeted industries and must be creating well-paying jobs for a sustained period of time.
"This isn't going to be an easy incentive to get," said Teresa Brydon, Largo's economic development manager.
Largo's city commissioners will be asked to vote on the incentives at an upcoming public meeting. Some of the commissioners have philosophical differences over whether the tax breaks are wise.
Commissioner Robert Murray doesn't support the idea be cause he's concerned about the effect it might have on Largo's tax base.
"The general fund is our most impacted fund," Murray said at a recent commission work session. "At some point we need to make up that revenue. I hate to think we have to switch this burden to property owners in lieu of having businesses pay their fair share."
However, it appears that all of the other commissioners are in favor of having another economic development tool at the city's disposal.
"On the other side of the coin, are we going to lose a company to Pinellas Park because they're offering something that we're not offering?" Commissioner Curtis Holmes asked. He added that property taxes contribute only about 25 percent of the city's general fund.
"Realistically, how much commercial land do we even have available in this city that we can use as a carrot to come forward to relocate in Largo? We have some, but we're not Hillsborough County that has miles of vacant industrial land," Holmes said. "We don't have that much land to go around, so you're going to have to put some kind of incentive out there."
Murray fretted that declining tax revenues have forced Largo to cut services and eliminate raises for employees in recent years. He argued that factors such as transportation, education and a skilled work force attract companies more than tax incentives.
But Vice Mayor Woody Brown responded that tax incentives for new jobs and development wouldn't affect Largo's existing tax base.
"In theory, if this brings development to Largo, for a short period of time, it will stall the tax base. But 10 years out, they'll be paying their taxes like everybody else," Brown said. "I would also like to provide jobs that our residents can go to without driving an hour. That's one of the goals of this program."
Largo voters approved of the concept in a city referendum on Nov. 6, with more than 58 percent voting in favor.
Two years ago, the Legislature passed a law allowing cities and counties to grant property tax exemptions to businesses that meet job creation guidelines. The minimum required number of jobs created to get tax breaks varies depending on the industry, from as few as 10 for a manufacturing company to a minimum of 50 for a corporate office.
Jobs must pay more than the area's average salary, which in Pinellas County was $40,372 last year.
Since the state law passed, 25 Florida cities and 34 counties have put such incentives in place, Brydon said.
State law allows up to 100 percent tax exemptions on property improvements, but some cities have enacted less-generous programs.
Largo staffers are recommending that commissioners not put a cap on the percentage of tax breaks, instead deciding each application on a case-by-case basis.
Mayor Pat Gerard is in favor of the policy as well.
"Really, this is about getting a leg up on our local competition," Gerard said. "If they're going to come to Pinellas County, they're going to come to Pinellas County, and we want them to come to Largo instead of Seminole or Pinellas Park or whatever."
Mike Brassfield can be reached at firstname.lastname@example.org or (727) 445-4151.