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CITIES TRY TO CALCULATE FALLOUT FROM AMENDMENT 1

Zephyrhills and Dade City officials think the newly approved property tax break will necessitate more slashing of city budgets.

The approval of Amendment 1 could mean changes for Zephyrhills.

On Tuesday, Florida voters said yes to the amendment that offers a property tax break to homeowners. But, Zephyrhills City Manager Steve Spina says that could mean cutbacks on certain city projects.

"I don't think it's necessarily a good thing," Spina said about Amendment 1. "It'll be good for some homeowners."

Zephyrhills collects about $4-million each year in property taxes, Spina says. But, early figures show that with the new property tax cuts, that budget may be slashed by about 10 percent, cutting away $350,000 to $400,000.

Future property taxes from new homes and businesses that are currently under construction will help some, Spina said.

"But, with property taxes going down, property values will probably go down. It's a plus for the homeowners, minus for the city. It's a double-edged sword."

There has been talk about buying a new building for City Hall, but those plans may have to be scrapped for now, Spina said.

Plans to build a big community park that would open in 2010 or 2011 are probably out the window, too, he added.

Zephyrhills Fire Rescue officials had wanted to replace the downtown station with new digs in the coming years and buy another building to use as administrative office space. With the property tax break, it will be a difficult to do both for the fire department, Spina says.

"We'll have to prioritize and figure out what the fire department's needs are and go from there," Spina said.

As far as job cuts for the city's 170 employees, Spina says, it's simply too early to predict right now what will happen.

Up the road in Dade City, rough figures indicated the city could lose almost $300,000 in revenue. That number, which was based on this year's tax rate, is bigger than some department's entire budgets.

"If the revenue is not made up in some other fashion, obviously we need to cut that out of our budget somewhere," said Jim Class, interim city manager and finance director.

But it's hard to say where any cuts would come from. After several financially lean years the city has avoided planning any major projects. Most ongoing developments are funded in part by Penny for Pasco funds.

It's up to the City Commission to decide where any cuts will be made. Class said he hoped layoffs wouldn't be part of the equation.

"I don't know that we're going to be hiring a bunch of people at this point," he added.

Right now the city is looking for a new police chief and a new city manager. Class said the implications of the amendment shouldn't affect the hiring process, but he wondered what candidates would think of the city's reduced revenue.

"I don't know whether these candidates might have some hesitation after realizing that there's going to be some challenges coming up," he said.

What's next

Budget shortfalls

With the expected drop in property tax revenue following Amendment 1 approval, Zephyrhills is expected to lose $350,000 to $400,000.

Dade City could lose nearly $300,000.

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