Tampa Mayor Bob Buckhorn's proposed city budget for 2018 confronts some hard realities of the times. With debt payments looming and another fire station opening in fast-growing north Tampa, the City Council needs to consider raising property taxes, especially with the prospect of another homestead exemption around the corner. But the mayor's proposed budget still seems overly ambitious, and the council should be cautious about raising taxes too much in a single swoop.
Buckhorn's $974 million budget calls for increasing the city's property tax rate for the first time since 1989. The aim is twofold: meet balloon payments on two large outstanding debts, and undertake several neighborhood projects in advance of a homestead exemption the Legislature has placed on the 2018 ballot that could reduce the city's property tax revenues by $6 million or more.
The city has no choice but to repay outstanding debt from a $6 million federal loan to remake the Centro Ybor entertainment complex and from $24 million in borrowing for the police and fire departments. That will require several years of debt payments of $13 million a year — money that's not currently available in the budget. Buckhorn also is being responsible by looking ahead at the impact of another homestead exemption, which would weaken the city's finances over the long term. What's more, President Donald Trump has proposed in his first federal budget to eliminate a range of urban development and transit grants that have provided tens of millions of dollars over the years to local governments in Tampa Bay. Cities will be expected to take up more of the slack, and Buckhorn is right to move the city's budget to firmer footing.
Still, his proposed increase of nearly a full mill in the property tax rate (from $5.73 to $6.63 in taxes for every $1,000 in taxable property value) looks like too big a jump in a single year. The impact citywide to an average home would be an increase of $140. This comes as the city has raised fees for stormwater and other services in recent years. And it would shift more of the burden to South Tampa, where middle-class homes are already being crowded out in a pricey market. The average annual increase in South Tampa ($279) would be 10 times the increase in central and east Tampa ($27). The impact to West Tampa also seems too high for a middle-class neighborhood.
Next year marks the fifth consecutive year of a projected increase in the city's taxable value since the recession. That increase, projected at 9.3 percent, is higher than the city's early estimate of 8 percent. The economy and the local property market seem to be strengthening on a sustainable basis. The city may be facing rising health care, pension and other costs, but it also should be encouraged about the longer-term trends. That is especially true given the redevelopment of Tampa's older neighborhoods outside the city center.
The council should examine the spending plan and consider whether to move some projects or hiring to later years. The millions in spending for parks, roads and other improvements should be scaled back to lower the proposed tax increase. Under Buckhorn's proposal, city taxes in Tampa would still be lower than in other big Florida cities, and Tampa's tax rate would be similar to what existed throughout the entire 1990s and early 2000s. But this still is a major jump. Other area governments, such as Pinellas County and St. Petersburg, are holding the line on property tax rates.
Tampa should be proud of how strategically it has invested in its downtown, older neighborhoods and aging infrastructure. But the issue here is how much and how soon. A more modest increase could cover the debt, help with the essentials and be gentler on those with fixed incomes.