It's the first promise in the campaign to renew the Penny for Pasco. Brochures say extending the 1 percent sales tax for another decade will "hold the line on property tax increases."
That's a tough promise to make.
The Penny would pay for a range of local government projects — renovating schools, buying sheriff's patrol cars, upgrading firefighters' radios and offering incentives to lure new businesses — that might otherwise be paid for with property tax revenue. Or not.
"Right now, there are identified projects that are needed for county services, basic county services," said Hutch Brock, a lawyer and former Dade City mayor who is co-chairman of the pro-Penny campaign. If those projects aren't paid for by the Penny, "there will have to be a fill-in of that lack of revenue. And some of that can come from property taxes."
"I think you have to take a very serious look at property taxes," Brock said. "If you don't, you're avoiding an obvious elephant in the room."
It's nearly impossible to predict whether property taxes will go up to pay for some of those projects if voters reject the sales tax on Nov. 6. Nor can anyone guarantee property taxes will stay flat if the Penny is extended. Still, supporters argue that renewing the Penny makes it less likely that voters will face a property tax increase.
The argument was much easier to make in 2004, when voters approved the first round of the Penny that was directly wedded to a property tax cut. As part of the deal, the Pasco County School District dropped its construction tax rate from $2 to $1.50 for every $1,000 of taxable property. That translated to an estimated $113 million in lower property tax bills over 10 years.
That property tax cut isn't part of the deal this time around, though.
After the sales tax was approved, the Legislature capped the School District's capital tax rate at the current levy. Officials can't raise that tax rate, even if voters reject the Penny.
"That's the scary thing for the School Board," said district planning director Chris Williams. This year, officials released a capital needs list totaling $1.1 billion over the next dozen years. Even with the Penny, they don't have enough money to do it all. Remove the Penny's projected $226 million for schools, and the district expects to be able to pay for only $500 million worth of projects in that long-term plan.
"That means those projects just get pushed back," he said. "Then you're prioritizing, you're fighting over that reduced amount of revenue."
The other public face of the Penny campaign is Stew Gibbons, a past president of the Pasco Economic Development Council. He said the Penny would pay for remodeling aging schools and other construction projects that most people expect from a school district.
"A big piece of economic development is being able to generate qualified workers," he said. "The quality of education in our school system is a key step in that."
Neither the county nor Pasco's cities have made any pledge to keep property taxes level if the Penny passes. Many of the cities have a shrinking tax base and other financial woes. The cities, which would split $50 million over the next decade if the Penny is extended, see the sales tax as a financial lifeline to cover pressing capital needs.
"I don't think it's an overstatement to call it critical," Brock said.
County projects a mixed bag
Pasco would divvy up its Penny revenue among several categories, two of which aren't normally covered by property taxes: transportation improvements and acquiring environmentally sensitive land.
Most Pasco road projects are paid for with gas taxes, impact fees or state money — not property taxes. Michele Baker, chief assistant county administrator, said the bulk of the projects in line for $90 million in Penny transportation money won't get done if voters don't extend the Penny. That includes several intersection improvements, new trails and upgrades to the county bus system.
"There will be opportunities lost and there will be delays," she said.
Another $45 million would help buy conservation land. That program was created in response to a 2000 court settlement in which the county agreed to buy wildlife corridors to connect large conservation tracts. To date, the county has funded that program only with Penny revenue.
If new sales tax money isn't available, the county would still be bound by the court settlement. But it's hard to imagine county commissioners approving a property tax increase to purchase environmental land.
Two other categories of Penny projects have been historically supported by property tax revenue: public safety equipment and economic development.
About $45 million of the Penny revenue would be split evenly between the Sheriff's Office and Pasco Fire Rescue. The sheriff plans to buy between 60 and 100 cruisers and about 350 laptops. Fire and rescue projects include $15.4 million for a required upgrade to digital radios, replacing a fire station in Wesley Chapel and buying new fire trucks and ambulances.
Another $45 million would go toward economic development, significantly boosting the county's efforts in that area. Baker called the extra money "critical" to shedding Pasco's identity as a bedroom community. If the Penny fails, any additional money to lure business would come from general tax revenue.
"If we don't have this and we need to make a deal, it's property tax money," she said.
The big question: If commissioners must find millions more to cover public safety expenses and attract jobs, do they raise taxes or cut other services?
Here's how Baker answered that question:
"We have made significant cuts," she said. "I think Pasco County delivers its services in a very lean and efficient manner. Every time now we go to make a cut, it directly affects a constituent-desired service."
No one can guarantee commissioners would increase taxes if the Penny doesn't pass, Baker said. She added: "It is possible that a future Board of County Commissioners might find themselves in a position of having to increase taxes. They would have to make those decisions."
Lee Logan can be reached at [email protected] or (727) 869-6236.