TARPON SPRINGS — A lower property tax rate might entice more people and businesses to move to Tarpon Springs, but a majority of city commissioners say that reducing the tax rate would be too risky with property values still falling.
After the first public hearing on the 2012 budget, the City Commission voted 3-2 to keep the city tax rate at 5.45 mills, which is $5.45 per $1,000 of taxable property value. The second and final public hearing on the budget will be Thursday.
A division on the commission was apparent during the tax rate debate at the first public hearing.
"Our revenues are going down," said Mayor David Archie, who voted along with Jeff Larsen and Susan Slattery to keep the rate the same. "I'm concerned about our budget because there are some things that are recurring."
But Commissioner Chris Alahouzos argued for lowering the rate to 5.18 mills.
"Not only would it help the people of Tarpon Springs, but we are going to be more competitive," Alahouzos said. "We cannot do business as usual. We have to be desirable."
Commissioner Townsend Tarapani agreed. He also voted against retaining the same millage rate as this year.
"I'm in favor of lowering it to 5.18," Tarapani said. "It's a good-faith effort to reduce the millage rate while attracting new residents."
As a mill equals $1 of tax for every $1,000 in taxable real estate value, a property owner with a home valued at $125,000 who had a $50,000 homestead exemption would pay $408.75 in city property taxes under the current tax rate. At the lower rate, the bill would be $388.50
The Budget Advisory Committee, a citizen board, supports the 5.45 rate.
Tarpon Springs, a full-service city providing both police and fire services, has one of the highest millage rates in Pinellas County. Clearwater, which also provides those services, has a tax rate of 5.15 mills.
Even with the 5.45 rate, Tarpon Springs is expected to bring in $344,000 less in 2012 than it did in this fiscal year because of declining property values. Property taxes account for about 34 percent of the city's revenue.
To meet the city's budgetary needs, $1.14 million will be pulled from the reserve fund, which currently has $10 million.
Tarpon has 358 full-time and part-time employees. There will be no layoffs, and no city programs will be cut or consolidated in the proposed budget.
"We have not consolidated anymore," finance director Arie Walker said. "We've been doing that type of thing since 2000 and we have reached about the end of the line."
Residents will see a slight increase in their water and sewer bills under a new rate structure approved in January 2010. The rates were designed to ensure the city could pay back bonds issued to build its new water-treatment plant.
But Commissioner Jeff Larsen noted that Tarpon residents will get a reduction in their solid waste bills. On Oct. 1, single-family and mobile homes receiving curbside service twice a week will see the rate drop from $28.78 per month to $16.69.
For mobile homes getting service once a week, the rate will drop from $22.42 to $14.23. Rear-yard pickup twice a week will go from $38.93 to $34.31 per month.
Contact Demorris A. Lee at email@example.com and (727) 445-4174.