ST. PETE BEACH — Facing a million-dollar shortfall, the City Commission must decide Tuesday if it will ask property owners to pay more next year to help balance the city's budget.
It will take about a half-mill increase in the property tax rate to close the budget gap, according to City Manager Mike Bonfield.
Currently, the city's portion of homeowners' property tax bills is set at 2.8569 mills ($285.69 per $100,000 in taxable assessed property values after all exemptions).
That is only slightly below the 2.9 mill rate levied in 2009.
According to a chart prepared by city finance director Elaine Edmunds, the millage rate would have to be increased to 3.3484 mills to cover the budget shortfall.
Property tax bills would jump about $50 for every $100,000 in taxable properly value, if the commission selects this option.
The highest millage the commission could set by law is 3.9663 mills (an increase of about $111 to those tax bills), but would require a super majority vote (four commissioners) to pass.
That option would allow the city to cover the shortfall, build its savings to about 25 percent of operational costs, cover additional costs of running the police department, and provide an extra $800,000 for city operations.
Bonfield's proposed budget would actually reduce property tax rates to the roll-back of 2.8533 mills, keeping property owners tax bills virtually unchanged.
Without a property tax increase, the $1 million shortfall would have to be taken out of the city's estimated $3.4 million in savings or by sharply cutting city staff and spending.
Tuesday's decision on the millage rate will establish the highest amount that can be levied. The commission would be able to lower that rate when the final budget is approved in September.
During an April prebudget meeting, several commissioners said they were willing to consider raising property taxes.
"If other options are unacceptable, then I would be willing to look at the tax rate," Commissioner Jim Parent said. "How could you not?"
Commissioner Marvin Shavlan said a tax increase would be his last option, only after looking "under every rock" to find other sources of revenue and items to cut out of the 2012-2013 budget.
One big reduction the commission is considering involves closing its police department, which currently costs the city $4.56 million a year, and switching to the Pinellas County Sheriff at a net savings of about $1.35 million.
But because that would require a voter-approved charter change that could not happen before November, the commission is faced with balancing a budget that includes the police department.
The commission will vote Tuesday to put the police department issue on the November ballot. A final vote will be taken later this month.