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Projected Penny tax revenue shortfall pushes Largo projects off wish list

LARGO — What a difference a few years make.

Four years ago, Largo expected to receive more than $90 million to fund Penny for Pinellas projects from 2010 to 2020.

Now, city staffers predict Largo will receive about $58.8 million in Penny sales tax revenues for that period.

The sluggish economy has caused a dive in sales tax revenues, quashing early projections for the latest extension of the Penny sales tax. Those were calculated before voters cast their ballots to extend the tax in 2007.

"Any projection is subject to change," said Kim Adams, the city's finance director. "We are still not certain when the economy is going to turn around."

For now, some projects have been pulled from Largo's list, including a public safety training center, a new east Largo fire station, development of the mid-section of Largo Central Park, and the expansion of the Largo Cultural Center, said Amy Davis, manager of the city's Office of Management and Budget.

The city has also dropped plans to use Penny money to buy lands for green space and to buy frequently flooded properties.

Other projects like a new Highland Recreation Complex have been scaled back.

The city originally planned to spend about $23 million to design and build the complex. Now it expects those costs to be closer to $17.5 million, with about $14.5 million in construction costs projected for the 2011-2012 budget year.

Reduced revenues had an impact on those estimates. But other factors, such as lower construction costs and a more defined project, also cut the price tag, Davis said.

Larger projects still on Largo's list include a new Fire Station 39, estimated at $4.3 million, and projects to harden the police station and relocate City Hall computer servers, estimated at about $4.2 million.

Davis said the Penny projections are far from an exact science. In January, the county released its own projections for divvying up Penny money and predicted Largo would get nearly $63 million for the 2010-2020 period. That's about $4 million more than Largo's current estimate.

An unpredictable economy makes it a complicated process, Davis said. In May, with a bit more data, Largo budget staffers will update their estimate in preparation for the 2011-2012 budget.

"It will probably change yet again," Davis said.

Lorri Helfand can be reached at lorri@sptimes.com or (727) 445-4155.

. FAST FACTS

Projects Largo has set aside

Penny for Pinellas is a 1 percent sales tax in effect since 1990. Citizens twice voted to extend the Penny. The money can be used for capital improvement projects, such as drainage improvements, roads, bridges, public safety, parks and municipal facilities.

Key projects/plans dropped from Largo's third Penny wish list:

• Public safety training center: $7 million

• Land purchase for green space: $5 million

• New east Largo fire station: $2.8 million

• Development of part of Largo Central Park: $2.5 million

• Expansion of Largo Cultural Center: $2.5 million

• Purchase of frequently flooded properties: $2.2 million

Projected Penny tax revenue shortfall pushes Largo projects off wish list 03/22/11 [Last modified: Tuesday, March 22, 2011 4:20pm]
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