LEALMAN — Taxpayers here are facing the prospect of a 22.7 percent increase in their property tax rate to pay for fire service.
That daunting news came Monday as district fire Chief Rick Graham briefed the Lealman Fire Commission on the gloomy outlook for the fiscal year that starts Oct. 1.
Property values are down sharply and the district must increase its contribution to the firefighters' pension plan, he said.
If firefighters agree to forgo raises and give up some perks, it would soften the blow slightly.
But there are two stumbling blocks. The firefighters union must agree to waive members' guaranteed 3 percent annual raises. And the commission must act quickly. State law requires it to set a tax rate no later than Aug. 3.
The commission voted unanimously Monday to ask the firefighters to reopen their contract and sacrifice their raises, some incentive pay and some extra time off.
The Lealman district, which serves more than 40,000 residents, employs 46 firefighters and has 15 nonunion officers and other employees, such as administrative assistants and mechanics. The nonunion employees also would have their wages frozen.
The district is located generally between Pinellas Park and St. Petersburg and extends from Interstate 275 to Park Street and is split in two by Kenneth City.
The Lealman budget, like all Pinellas County fire department budgets, is divided into two parts — fire and emergency medical services. The EMS portion is covered by a countywide property tax set by the Pinellas County Commission. Next year's EMS budget is scheduled to come before the commission Tuesday.
The fire portion of the budget is paid by local taxes. In the case of independent fire districts like Lealman, the income is solely from property taxes. That's good news in years when property values go up, and bad news when they go down, as they have the past couple of years.
This year, Lealman's property values have dropped 13.4 percent, Graham said.
"This number this year is what's directly affecting us," Graham said. The 13.4 percent decrease "is pretty big. … That's a lot for our citizens to absorb."
Added to that, Graham said, is a state ruling that requires the district to add 3 percent to its pension plan. Then add in the 3 percent raises and other perks the firefighters are guaranteed under their existing contract and the picture just gets worse, Graham said.
As things stand, he said, the current fire budget is about $4.7 million and the tax rate is about $4.48 per thousand dollars of assessed, taxable property value. For a $150,000 home with $50,000 in homestead exemptions, the local fire tax is about $448.
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Even if the wages are frozen, the budget would have to increase to about $4.9 million to include the state-mandated pension increase. That would take the tax rate up to about $5.40. That would make the taxes on the above property $540, or $92 higher than this year. That's about a 20.5 percent increase.
If the wages are not frozen, the fire budget would have to go up to about $5.1 million, which would take the tax rate up to about $5.50. That would make the fire taxes on the above property $550 for 2010-11, or about 22.8 percent more than they are now.
Most fire board members said they do not want to increase the tax rate this year because they think fiscal conditions will be even worse next year and they will have to increase it then.
Each of the six offered to give up their $500-a-month pay, which would ease the budget by about $30,000.
Board member Julie Adams said she was willing to raise the tax rate slightly "if we can save a couple of jobs." Layoffs, she said, could come next year if the economy does not improve.
Graham said that like every other government in the county, the fire district is facing lower incomes and the need to cut back and possibly lay off employees.
Graham did not rule out other options for reducing expenditures.
Anne Lindberg can be reached at (727) 893-8450 or email@example.com.