LARGO — The city manager is proposing that Largo raise property tax rates by 5 percent — not only this year, but 5 percent every year until the city government reaches certain benchmarks.
"There is strong support for smaller and leaner government, but there is opposition to the elimination or reduction of specific services," City Manager Mac Craig wrote in a 406-page budget document posted on the city's website.
"To address this challenge, city administration is proposing a long-term strategy within the general fund to provide for a consistent and incremental 5 percent property tax revenue increase each year until certain milestones are met."
Those benchmarks would include rebuilding the city's reserves and adding more police officers and firefighters. Even with a 5 percent tax hike, officials say the city couldn't afford to do all of that next year.
Beginning next week, Largo's elected officials will discuss next year's tax rate at a series of meetings and public hearings that will continue through the summer. No matter what city staffers ask for, Mayor Pat Gerard said, the City Commission wouldn't be able to commit to a particular tax rate beyond next year.
"The budget is kind of a negotiation process between the staff and the commission," Gerard said of the city staff's proposal for continuing tax increases. "That's what they'd like us to do, and that's all well and good. But we're the ones that would have to do it and take the heat for it."
The city manager's $130 million budget proposal calls for a 5 percent increase in the property tax rate, to 5.22 mills. One mill is equal to $1 of tax for each $1,000 of assessed, nonexempt property.
For example, the owner of a home valued at $100,000 after exemptions paid Largo $499 in property taxes under the current millage rate of 4.99. That same homeowner would pay $522 under the proposed tax rate for 2014.
Last year, Largo raised its property tax rate by 9.7 percent to bring an extra $1 million into city coffers and stave off deep budget cuts.
Largo has gone through seven straight years of declining revenues, forcing management to pare $16 million from general fund spending since 2008 and trim more than 97 jobs.
"It was hoped that in 2013 the city would begin to see revenues growing," Craig said. "However, several revenue streams have either declined or remained flat, while the cost of doing business continues to rise."
Craig is suggesting that Largo's property tax rate increase by 5 percent each year until the city can do two things:
• Hire more police officers, firefighters and IT professionals.
• Rebuild the city's fund balance, which is money carried over in case of an emergency. Often called a "rainy day fund," it's at its lowest point in years. The balance has dropped from nearly 20 percent of the general fund budget a few years ago to 8 percent this year. Craig recommends bringing it back to at least 10 percent and eventually to 15 percent.
Mike Brassfield can be reached at [email protected] or (727) 445-4151.