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Port Richey reviving a 10 percent tax on electricity

PORT RICHEY — It was, as the City Council goes, a grand and generous gesture: Zap the electricity tax, thin the utility bills, leave a little more money in residents' wallets.

The tax had for decades jolted the budget into balance. Cutting it meant kissing goodbye to more than $300,000 a year the city might soon need.

But the council in 2008 said: No worries. This was for the overtaxed, those for whom every buck counted. The cut was the city's way of giving back.

Trouble was, Port Richey had its own problems. No one knew how to replace the lost revenue. Property taxes continued to tumble. And as the financial emergency stretched on, that extra cash began to look so much sweeter.

So, last week, the council said: Well, about that …

Beginning next year, the city plans to reinstate its 10 percent tax on all electricity bills citywide. The average resident using about 1,000 kilowatt-hours a month will see bills about $7 bigger.

City officials say reinstating the tax, first adopted in 1959, will earn the city $344,000 a year. Since the general fund was, at April's count, $71,000 in the red, that revenue could be a big help — though the council still wasn't happy.

"We've lost over $600,000," council member Terry Rowe said. "I'm wondering why this wasn't addressed sooner."

A motion to reinstate the tax passed unanimously last week, keeping the support of Mayor Richard Rober and Vice Mayor Steven O'Neill, who voted against the initial cut.

The supporters who passed the cut — former Vice Mayor Mark Hashim and former council members Perry Bean and Phil Abts — are no longer in office.

If the ordinance spelling out the utility tax passes in an upcoming council meeting, the tax will be levied on January's electricity usage. New Port Richey, Tarpon Springs and Brooksville assess similar 10 percent taxes on residents' utility bills.

Hashim, who first suggested the city ditch what he called "double taxation," earned much of the city's scorn for the decision.

"The rest of the council went along with that man and put the city in a terrible, terrible bind," said former council member Phyllis Grae. "Now the people have to face what should not have happened."

Contact Drew Harwell at dharwell@sptimes.com or (727) 869-6244.

Port Richey reviving a 10 percent tax on electricity 07/20/10 [Last modified: Tuesday, July 20, 2010 8:56pm]
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