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Council says no to tax rate hike

(ran PW, PS editions)

City Manager Vince Lupo's proposed tax increase didn't last long.

Tuesday night, the Port Richey City Council rejected the .68-mill increase Lupo wanted to cover a $200,000 shortfall in the budget, setting up meetings next month when the council will have to cut the budget.

The council decided to keep the tentative tax rate the same as the current rate of 5.82 mills. Under state law, the council has to set a tentative rate, hold hearings on that rate and then approve it. After the tentative rate is set, council members can only lower it.

Under the approved tentative rate, the owner of a $100,000 home with a $25,000 homestead exemption in Port Richey will pay $436.50 in city taxes.

Lupo told the council last week in a memo that increases in insurance costs and utility bills for the new City Hall have hurt. And a city redevelopment effort passed earlier this year takes all gains to the tax base and directs them to redevelopment funds, an $80,000 hit on the city's revenue.

"If you do not set it at this rate, you will be faced with a series of options that really aren't that palatable," Lupo said Tuesday night.

The vote ended up 3-2, with Council members Pat Guttman, Phyllis Grae and Dale Massad voting to keep the current rate. Mayor Eloise Taylor argued that the council should think about giving themselves some "wiggle room" during budget sessions with the understanding they didn't want to raise taxes, and Bill Bennett agreed.

But Massad said the council should take the challenge of cutting the budget.

"I don't know if we want to let ourselves have wiggle room," he said. "When we have wiggle room, we seem to wiggle into it."

Lupo gave council members some rough drafts of budgets from different departments so they could start looking for places to cut even before the vote was taken. Lupo said he would give them more in the coming weeks so they could be prepared for their first budget workshop on Sept. 5.

Grae said she was upset that the council was being asked to make a decision on the tax rate without having a more finalized budget. Absent from the draft budget was the city's police department, which has been hard hit by increases in calls because of the new Wal-Mart. Grae said she has heard the police budget will increase.

Lupo said council members might learn that the cuts they will have to make are worse than raising taxes. And by setting the millage rate low, they have no choice but to cut, he said.

"Will we absolutely need an increase of .68 mills? We may not," he said.

But Lupo said city staff would start looking for cuts.

"We'll live with the consequences," he said. "We must submit a balanced budget by law. There are no free lunches."

_ Staff writer Matthew Waite can be reached in west Pasco at 869-6247 or (800) 333-7505, ext. 6247. His e-mail address is