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Pasco utility tax cut may create hardships

Port Richey's vice mayor says he is confident the city manager can find money necessary to balance the upcoming budget. At the rate things are going, City Manager Richard Reade will need a metal detector to comb for loose coins at the city's park.

Across the state, revenue sharing dollars are down. Ditto sales tax collections and gasoline tax receipts. Residential property tax collections will drop because of the higher homestead exemptions approved by voters in January.

So, how does Port Richey's Council majority deal with falling revenue? It wants it to fall even further.

Vice Mayor Mark Hashim and Council members Perry Bean and Phil Abts are seeking to cut the city's franchise fee on utilities. The utility tax, a 10 percent surcharge on electricity, accounts for $264,000 in the city budget.

Under state law, local governments can assess franchise fees on private utilities using public rights of way. The costs in turn are passed on to customers. Hashim suggested killing the electricity tax, saying city residents need the financial break because of the down economy and high gasoline costs.

The altruism might be more appreciated if the biggest beneficiaries were indeed struggling residents. However, we suspect the real payoff won't go to the households that already turned up the thermostats to save money. The biggest savings will go to the biggest electrical users: large businesses like the 24-hour Wal-Mart Supercenter at Ridge Road and U.S. 19.

If the council majority wants to tweak the utility surcharges, it should be done in context of the overall city budget. As it stands now, Hashim, Bean and Abts are poised to eliminate $264,000 from the revenue ledger with no public suggestions on how to make up the difference. Telling Reade to take care of it is hardly responsible leadership.

It is reminiscent of actions last year from the Council, which did not include Bean and Abts at the time, that decided to cut the property tax rate while the then-city manager was home sick. They miscalculated the impact by nearly 200 percent and forced administrators to raid reserve accounts to balance the budget.

Hashim is unwise to repeat the strategy. Voting to reduce revenue should be accompanied by a public debate identifying other income sources or detailing potential service cuts. Will public safety be affected? Public works? Parks?

It is irresponsible to consider altering its utility tax without knowing the full implications on the city budget. Trying to be sympathetic toward city residents facing financial hardships is one thing, but creating hardships for others is counterproductive.

Pasco utility tax cut may create hardships 07/16/08 [Last modified: Saturday, July 19, 2008 12:49pm]
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