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Proposed Kenneth City tax rate aims to keep pace

KENNETH CITY — This town, like several local governments in the county, is proposing to raise the tax rate in the coming year to make ends meet.

Kenneth City's proposed budget for the 2008-2009 fiscal year would increase the tax rate from its current 3.4448 mills to 3.9902 mills. A mill is $1 of tax for every $1,000 of non-exempt assessed property value.

The proposed millage would go to finance an operating budget of about $2.226-million, which is about $30,100 less than the current $2.256-million budget.

Kenneth City is not the only government to propose increasing its tax rate to offset losses caused by lowered property values and the effect of Amendment 1. The cities of Pinellas Park and Clearwater, and the Lealman Fire District and the Juvenile Welfare Board have similar proposals on the table.

But none of the millages are definite. All the bodies must hold two public hearings before passing final budgets and millage rates.

The millage rates could drop at those hearings, but they would not increase from the proposed rate. Kenneth City's first budget hearing is set for Aug. 28.

Although voters passed Amendment 1 in an effort to lower taxes, the legislation left a couple of loopholes. One of those is the ability to alter "roll" rates.

The roll rate is the tax rate, or millage, that a city would charge to get the same amount of dollars from property taxes that it got the preceding year.

It works this way: If property values stay the same from one year to the next, and a city wants to get the same amount of money, its millage, or tax rate, would not change.

But if property values go up and a city does not want to collect more money than it did the year before, it would decrease its millage, or tax rate. That's called a rollback.

If property values drop, the city would have to increase its millage rate to get the same dollar amount it got the year before. Some call that a roll forward.

Because property values dropped this year, Kenneth City would get less money than it did this year by maintaining the current tax rate. But because the town needs about the same amount of money for next year, it needs to increase the tax rate somewhat.

Proposed Kenneth City tax rate aims to keep pace 08/02/08 [Last modified: Wednesday, August 6, 2008 4:32pm]
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