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In antitax climate, leaders fear for Penny

The fiery pleas ofoutraged taxpayers marked this budget season for many local governments.

Some stood firm, others relented and trimmed their tax rates.

But for local leaders, the antitax climate has given rise to a possibility even more troubling than the marathon budget meetings: Might fed-up voters in March defeat a proposed 10-year extension of the Penny for Pinellas sales tax?

"It is of concern," County Administrator Steve Spratt said. "How much of that frustration spills over into the Penny decision?"

In 1989, voters barely approved the penny-on-the-dollar sales tax, which took effect in 1990. By 1997, support had grown and 65 percent of county voters approved extending the levy until 2010.

The county and municipalities have come to rely on the revenue for road, recreation and building projects. Penny money now pays 75 percent of the county's infrastructure costs.

Marty Altner, a Clearwater rental property owner, has been at the forefront of calling for property tax cuts at several recent county budget meetings. Altner likes the Penny tax.

He likes that it's a levy paid by all purchasers, not just property owners, and the fact that visitors, not residents, fund about 35 percent of Penny revenue.

But if local government leaders fail to get serious about alleviating the property tax burden and don't start lobbying for statewide reform in Tallahassee, he sees voters turning against the Penny.

"This anger is going to spill over," Altner said. "And when people get angry, they can throw a punch and not care about who gets hit."

Yet support remains.

Dick Newman was in Seminole on Wednesday night for the second of four meetings the county is holding to drum up Penny support.

Considering all the projects that won't get built without it, Newman said, he has no choice but to vote in favor of extending the Penny.

A Penny extension for 2010 to 2020 will generate an estimated $1.9-billion over the decade.

About $365-million would come off the top for jail and court costs, the bulk of which likely would be used to build needed jail space.

The county would take about half of what remains, and the rest would be divided among the municipalities based on population.

Clearwater Mayor Frank Hibbard is counting on that money. So far, the Penny has brought his city more than $58-million, and Hibbard is considering steps to ensure that voters approve the extension.

Like all Pinellas municipalities, Clearwater has developed a list of projects to be funded by the Penny in years to come. The lists are used to give voters a sense of what they will get for their money.

But Hibbard said some "nonessential" projects, such as library upgrades, may be struck from his list. Voters might find such expenditures frivolous, he said.

Less "sexy" but "essential" items like drainage projects now being funded by property tax revenue would replace them, Hibbard said. Such moves would make his Penny list easier to defend while creating flexibility in Clearwater's annual budget, he said.

"I think voters are questioning it," Hibbard said of the Penny renewal. "I'm extremely concerned."

With no Penny revenue, government leaders throughout Pinellas would have to scramble to pay for critical, big-ticket projects. For Spratt, the county administrator, those projects include paving and road improvements ($165-million) and replacing the aging Dunedin Causeway bridge ($127.5-million).

Issuing bonds is an option. But to pay off the annual debt, the county would have to either cut services or raise property taxes, Spratt said.

Between now and the March 13 vote, the administrator must try to persuade a frustrated, tax-weary electorate that the Penny is a better alternative.

"We have got to maintain that revenue stream to avoid major backsliding in our quality of life," Spratt said.

Times staff writer Anne Lindberg contributed to this report. Will Van Sant can be reached at 445-4166 or vansant@sptimes.com.

ABOUT THE PENNY

The penny sales tax took effect in 1990. In 1997, voters extended it to 2010. n WHAT IT BUYS: Local governments use the funds for road, recreation and building projects. It pays 75 percent of the county's infrastructure costs. n TEN MORE YEARS? An extension to 2020 would raise about $1.9-billion. Voters will decide on March 13, 2007. n ON THE WEB: www.pinellascounty.org/Penny/.

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