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Spring Hill Fire Rescue urges new tax on businesses to cover shortfall

SPRING HILL — Hoping to overcome a projected $1.3 million revenue shortfall, the Spring Hill Fire Rescue board will ask the county to levy a new tax on businesses within the fire district.

The tangible personal property tax would be similar to the tax that businesses outside of the district already pay to Hernando County. The tax would be on the value of any items inside a business that are used to conduct the business, such as shelving, computers and other equipment.

The tax would raise an estimated $300,000 to $500,000 to help fund the district through Sept. 30, 2011, according to the district's financial director, Terri McClanahan.

However, critics say the new tax would hurt businesses already struggling in a poor economy.

"This is not the way to go," said commissioner Rob Giammarco, who cast the lone dissenting vote Wednesday night. "We're at 13 percent unemployment (in the county). So now we're saying, "Hey, baby, we're going to sock it to you.' "

Commissioner Amy Brosnan, who supported the tax, said exemptions would ensure that only large businesses such as Wal-Mart, Best Buy and major chain restaurants would be affected.

"Sometimes we have to do things that aren't comfortable," she said. "I really doubt that small businesses will feel it."

The proposal would exempt the first $25,000 worth of equipment, meaning that many small businesses could avoid a heavy tax.

By contrast, the large retailers would pay more.

According to Nick Nikkinen of the Hernando County Property Appraiser's Office, Wal-Mart on U.S. 19 in 2008 paid $14,044 in tangible taxes on $2.5 million worth of property. He estimated that the store would pay the fire district an additional $5,857 if the new tax were imposed.

Giammarco said he felt the fire board's decision to impose the tax was "shortsighted" and bypassed the more responsible route of having the district work harder to stay within its means.

Earlier this year, the board increased EMS fees to put the district more in line with the fire and rescue units in surrounding counties. It also was able to cut payroll by merging dispatch operations with the county.

However, last month county officials notified the district that the estimated tax revenues for 2009-10 would be down 11.2 percent. Officials had expected a 10 percent decline.

With about $1.4 million less in its general fund, McClanahan said she and Chief Michael Rampino looked for ways the district could avoid dipping into its reserves.

The tax, which would be levied at the district's current 2.268 millage rate, would be the most painless way because it would not affect homeowners and small businesses, she said.

Commission Chairman Leo Jacobs agreed, telling his fellow commissioners that he felt that businesses in Spring Hill should pay more to help the fire district that protects their property.

"Our generosity has come to an end," Jacobs said. "We need help."

Jacobs' words didn't please County Commission Chairman Dave Russell, a Spring Hill businessman, who said he plans to vote against the proposed tax, which is expected to come before the board at Tuesday's commission meeting.

"As a businessman, I was appalled by those words," Russell said. "This won't bode well with many businesses in Spring Hill."

Logan Neill can be reached at lneill@sptimes.com or 848-1435.

Spring Hill Fire Rescue urges new tax on businesses to cover shortfall 07/23/09 [Last modified: Thursday, July 23, 2009 7:51pm]
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