Seminole may be looking at increased tax rate

SEMINOLE — For the first time since 1999, property owners here could see their tax rate go up in the coming fiscal year.

Unlike most city-imposed taxes, any increase could also hit thousands of people who own property in the unincorporated portion of Seminole's fire district.

The reason: Most, if not all of the increase, would go to cover increased pension expenses for Seminole's firefighters. The fire budget is funded by taxes from all who live in Seminole's fire district — three-fourths of which is in the unincorporated area — and any increase in that budget will be felt by all.

Contributing to the possible budget woes for 2012-13 are still declining property values and bills pending in the Legislature that would eliminate business license taxes. That could mean a $150,000 hit to the Seminole city budget.

The bad news came during Tuesday's council meeting in the form of a warning from City Manager Frank Edmunds that council members would likely have some hard decisions to make come budget time.

Edmunds pointed out that the fire department's $8.1 million budget has decreased by about $1.8 million or 18 percent since the 2007-08 fiscal year. The decreases came about in part from layoffs and other staffing decreases.

Despite the lower departmental costs, the amount of the fire budget devoted to pension costs almost doubled this year from $586,717 in 2010-11 to about $1.1 million this year. Currently, the pension accounts for about 14 percent of the fire department's budget. Next year, pension costs are estimated to be a bit less — $943,901 or about 11.5 percent of the projected $8.2 million fire budget.

It's too early to tell how much the tax rate would have to be increased to cover the additional costs and the possible loss of income from lower property values and elimination of the business license fees.

But, Edmunds said, the city is doing all it can to avoid raising taxes. The first step is to have the fire pension audited to see if contributions could be reduced.

Other possibilities, he said, are reducing fire operating costs to offset the cost of the pension, decreasing benefits or establishing a new pension plan that would be more sustainable.

Reach Anne Lindberg at alindberg@tampabay.com or (727) 893-8450.