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St. Leo may shift to utilities taxes

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Town commissioners, with an early eye toward expanding town boundaries, are studying a potential tax restructuring that could slash property taxes while shifting costs to Saint Leo University and its students.

Florida League of Cities financial expert Ken Small visited commissioners for a workshop Monday, explaining how the town could use untapped utilities and communications taxes to raise money. There is so much potential for new revenue through those two taxes that the city could eliminate its property tax of $3 per $1,000 of assessed, taxable property value, he said.

"It's something to think about," Small said.

Mayor Janis Klingle said residents would still pay taxes to the city, but they would be in the form of user fees _ taxes based on their electricity, cable television and cell phone bills. Those are things a frugal person can control, she said.

"It sounds like a good idea to shift those things around," she said. "At least they would have some control, and that's the saving grace."

A switch from property tax to utilities taxes would also shift much of the cost of running a city onto groups not paying into city coffers, Small said.

Saint Leo University is exempt from property taxes, but the school would have to pay utilities taxes, he said. And students at the university who have cell phones billed locally or who have cable television would also have to pay a tax to the town.

About 100 of the 900 homes in the Lake Jovita golf community are inside town limits, but commissioners said they are interested in having the rest of the property owners join the town.

Commissioner John Fantone, a Lake Jovita resident, said the town's property tax _ a tax property owners would have to pay in addition to county taxes if they joined the town _ would likely discourage those outside the town from joining.

"There's nothing the mayor can do, or we can do, to interest them in paying more taxes to join us," he said.

Small said most cities include a tax on utilities. Municipalities are allowed by state law to charge up to a 10 percent electricity tax, plus up to 5.2 percent on communications services such as cable television, cell phones and long-distance telephone service.

St. Leo charges no electricity tax, and has a 1 percent communications tax.

Commissioners made no decisions at Monday's workshop but agreed to discuss the idea further in the coming year.