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More cities and counties turn to tax increases to bridge budget shortfalls

As cities and counties throughout the Tampa Bay area face another year of budget shortfalls, many are beginning to find that the risk of cutting deeper into budgets and services, eliminating police officers and park space, is too great.

Instead, some are proposing the politically dangerous option of raising property taxes during an election year.

Pinellas County Administrator Bob LaSala is the latest.

On Tuesday, LaSala will recommend that county commissioners raise the general fund tax rate by 5.1 percent, which would generate enough revenue to pay for an unanticipated Medi­caid bill of $12.2 million from the state. He also is proposing a separate tax hike to cover increasing emergency medical service costs.

Short $24.1 million for next year's budget, LaSala said he concluded that further spending cuts would do untold harm to public safety and other services.

In St. Petersburg, Mayor Bill Foster has called for a new fire fee on property owners to bridge a $10 million shortfall next year in lieu of more cuts. In Pasco County, commissioners tentatively have agreed to raise the tax rate to compensate for declining property values. And in Hillsborough, where officials pride themselves on having reduced the overall tax rate during the past two decades, County Administrator Mike Merrill has proposed both a tax cut and the option of asking voters in November if they would support a slight tax rate increase to pay for new parks.

"Maybe it's getting to the point where the citizens realize we've kind of gone far enough," said Pasco County Administrator John Gallagher. "The pendulum may have swung far enough to the cost-cutting side."

That is not the case in Tampa, where Mayor Bob Buckhorn said closing his city's $26.7 million shortfall next year is "largely going to be about cutting."

With no boost from new revenue, the city is looking at a variety of options, including shrinking department budgets by 5 percent, leaving vacant positions unfilled, and pushing out debt and delaying purchases.

"I'm still committed to doing this without raising taxes and, to the extent possible, no layoffs," Buckhorn said. "I'm trying to find it internally."

Clearwater officials also are trying to keep property taxes flat next year. To plug a projected deficit caused by plummeting property values, city leaders are drawing on $1.6 million from their rainy day fund. Expansive changes to city pensions, which could save the city $4.5 million in the first year, will go to voters in November, and officials are counting on the referendum's approval to help with future spending.

Wanting to avoid further cuts in personnel and service, Brooksville city officials voted last week to implement a new fire assessment to offset an estimated $600,000 shortfall in property tax revenue.

The new fees will raise about half of the city's fire budget and go a long way toward avoiding the need to raise the millage rate.

"It's more fair to have everyone pay toward providing a service that everyone benefits from than to have only a few pay for it," said Brooksville Vice Mayor Lara Bradburn.

In Pinellas, where years of cuts have reduced the county's staff to its lowest level since 1985 and slashed some departments' budgets, LaSala said Thursday that raising the tax rate was the only practical step left, unless commissioners were willing to eliminate more services.

In a draft budget message, Chief Assistant Pinellas County Administrator Mark Woodard put the situation in grim terms.

"Every organization has a tipping point; a point beyond which the organization is irreparably damaged," he wrote. "I believe we are at that point."

LaSala's proposal would raise the general fund tax rate by 25 cents for every $1,000 of assessed property value. The average Pinellas homeowner, whose property is worth about $103,000, would pay roughly $25 more, with no exemptions, he said.

To cover the remaining $11.9 million shortfall, LaSala is proposing to tap the county's reserve fund.

How much support he can expect from the county's seven commissioners is unclear. At a meeting in May, three of the commissioners supported the idea, two opposed it, one refused to take a position, and one was absent.

Commissioner Nancy Bostock, who opposed the tax increase then, said she still holds that position.

"A lot of the commissioners were very indignant," she said of the state's decision to change Medicaid funding, which will cost Pinellas County about $68.9 million over the next 10 years. "And I agree, but then we turn around and do the same darn thing to our citizens? We need to figure out how to fund it within our budget."

Times staff writers Richard Danielson, Drew Harwell, Lee Logan, Bill Varian, Logan Neill and Mark Puente contributed to this report.

More cities and counties turn to tax increases to bridge budget shortfalls 07/05/12 [Last modified: Thursday, July 5, 2012 11:08pm]
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