Sunday, August 19, 2018
Editorials

Editorial: Tampa City Council should limit property tax increase

The Tampa City Council struck the right balance between fiscal reality and restraint by voting earlier this month to scale back Mayor Bob Buckhorn's proposed property tax increase. Though the city needs new revenue to meet several long-term expenses, the mayor's proposed increase was too much over a single year, and it fell disproportionately on one part of the city, hurting renters and middle-class homeowners. The council was right to embrace a more modest increase, and it should finalize that decision at its final meeting on the budget today.

Buckhorn proposed a $974 million budget in July that called for increasing the city's property tax rate for the first time since 1989. The purpose was twofold: Meet balloon payments on two large debts and strengthen the city's financial picture in advance of another proposed homestead exemption on the 2018 ballot that could cut the city's property tax revenues by $6 million or more a year.

The mayor's proposal would have raised the property tax rate by nearly a full mill (from $5.73 to $6.63 in taxes for every $1,000 in taxable property value). While the average citywide would have been an increase of $140 a year, the burden would have fallen disproportionately in South Tampa, where middle-class homes are already being crowded out in a pricey market, and to a lesser degree in West Tampa, where many residents already survive paycheck-to-paycheck.

The council voted 4-3 earlier this month to set a tentative property tax rate of about $6.33 in tax per 1,000 of assessed value, choosing the low end of several options offered the mayor as a compromise. That would reduce the overall burden and address some concerns over tax equity across various parts of the city. At its final public hearing on the budget today, the council can lower the tax rate but cannot raise it. Council members are in the ballpark. A smaller rate increase would help and not put the city at a competitive disadvantage.

Several council members fault Buckhorn for not alerting them earlier to pending debt payments totalling more than $20 million. But that is a political issue; the city has no choice but to repay the money. The council should look for more savings elsewhere in the budget that could help further reduce the property tax increase. Some new employees in the parks department and other offices could be phased-in rather than hired next budget year. The council could postpone several community center projects to save more than $3 million. The $4 million in new money for the fire department could be scaled back.

The Greater Tampa Chamber of Commerce opposes the tax increase, calling it a "dangerous precedent" and challenging officials to maintain Tampa's place as one of the nation's most affordable cities. Even with the increase, Tampa's rate would be lower than it was more than 25 years ago, and the property tax rate would be lower than in many major Florida cities, including Miami, Orlando and St. Petersburg.

Council members should approve a modest increase and work with the mayor on finding savings in next year's budget. Both sides need to view this as a shared challenge. The city did a good job in managing through the recession. It needs to keep a lid on hiring and on new capital spending. But a modest property tax increase can help strengthen the city's financial footing and not unduly burden residents and businesses.

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