NEW PORT RICHEY — Back in March, the City Council gave this direction to administrators preparing next year's budget:
Raise the tax rate before you cut services.
So that's what the council got in the staff's proposed $35 million spending plan for the 2009-10 fiscal year.
The proposed budget, which officials present to the council tonight, would raise the city's tax rate by 24 percent — to $8.19 for each $1,000 of value from $6.63.
That new rate would allow the city to avoid any major cuts or layoffs by collecting essentially the same amount in property taxes as it did last year for its general fund.
With taxable values in the city down by roughly 19 percent, officials expect a nearly $1 million revenue loss if they keep the same tax rate.
But even with the increase, not every city employee would be safe from layoffs: With other revenue sources down, the city plans a 4 percent reduction in its roughly $17 million general fund — and that means the loss of six positions.
The police force bears the largest brunt of it: The department is considering laying off three first-year patrol officers and not filling the position of an officer who is retiring this fall.
"We don't think we can really afford to do that," said police Chief Martin Rickus. "We're hoping this doesn't have to happen."
Perhaps surprising to many is this: The proposed rate is higher than the so-called rollback rate, the rate that typically raises the same amount of property tax revenue as the prior year.
But finance director Rick Snyder said Monday that the rollback rate in New Port Richey would still leave the city short nearly $585,000 of last year's property tax revenue.
He said that's largely because New Port Richey has a wildcard that alters the formula for coming up with the rollback rate: The city's community redevelopment fund, which takes a percentage of property tax revenue generated each year.
"We realized early on that going with the rollback rate wasn't going to bring us to the full amount," said Snyder.
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Other local municipalities are still planning their budgets, though none expects the revenue loss that Pasco's largest municipality does. Port Richey and Dade City officials are still working on their budgets.
Zephyrhills' working budget draft is based on keeping the same tax rate as this past year, 5.57 mills. At that rate, the city would have to come up with an additional $445,700 in revenue or cost savings to compensate for an $84 million loss in taxable property values.
Two vacant Zephyrhills positions will most likely be eliminated, as well as employee raises. The City Council will meet Monday to discuss raising the millage rate to 6.41, the rollback rate, or making further cuts.
"We might have to squeeze a little more juice out of the lemon here," said Zephyrhills City Manager Steve Spina.
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In New Port Richey, the proposed tax increase is high enough that it would need the unanimous vote of the council before it could go into effect, said Snyder. (A simple rollback rate, by contrast, requires only a majority vote.)
It isn't clear how easy it would be to marshal a unanimous vote. While the majority of the council in March gave its blessing to possibly raising the tax rate, one member, Judy DeBella Thomas, went on record opposing any increase.
Thomas was running for re-election at the time and made her opposition to raising taxes part of her campaign.
But on Monday, Thomas said she hadn't made up her mind either way. "I do not want to raise taxes, but I just want to see what transpires" in upcoming budget workshop sessions, she said. "You just never know how clever we can get" in finding ways to cut the budget.
Rickus said he isn't sure where else he could cut his budget. "All we have left is people," he said.
He said he's concerned about having to lay off three first-year officers and hopes the council can avoid those cuts. In the meantime, he has applied for a federal grant to "rehire" the officers.
Mayor Scott McPherson acknowledged that the tax increase may be a tough sell. But he said that the city had been knocking down its overall spending each year.
In 2006-07, for instance, spending stood at $48 million. For next year, officials have proposed lowering it to $35 million.
"You can only do this for so long without seeing a hit to services in the city," he said. "It's really easy for me as an elected official to sit up there and scream 'No new taxes.' But with that comes the next question: Now what?"
Times staff writer Helen Anne Travis contributed to this report.
Jodie Tillman can be reached at [email protected] or (727) 869-6247.