Clearwater tax rate stays flat but city spending rises

CLEARWATER — Coming out of a conservative year amid the uncertainty of the coronavirus pandemic, the city is finalizing a 2022 budget that will put additional tax revenue to use.

The proposed $615 million budget, 6 percent larger than last year, includes increased expenditures for building and infrastructure renovations, implementing a $15 minimum wage for city workers, seven new hires and capital projects like a Fort Harrison Avenue overhaul and a new recycling processing facility.

The Clearwater City Council voted on Thursday to set the 2022 property tax rate at $5.95 per $1,000 of assessed, taxable value, the same rate that has been in place since 2018. Because property values rose 5 percent over last year, the city will collect $4.3 million more property tax revenue than in 2021, according to budget officer Kayleen Kastel.

City Manager Bill Horne said this week this budget is “focused on the future” as the coronavirus pandemic did not impact city revenues as negatively as expected.

The new hires include two parks and recreation employees to clean up trash on Clearwater Beach; four planning and development positions to work in records and code compliance; and a housing specialist.

The city will hold a budget workshop on Aug. 3 and will vote on adopting the budget on Sept. 16 and Sept. 30.

Beyond next year, Clearwater’s long-term forecast has also improved from what officials had projected.

During 2021 budget discussions, finance director Jay Ravins said the city’s reserves would be in the red by 2025, which would require a 16 percent hike on the property tax rate that year.

Because of cost savings across departments and the fact that the pandemic did not bruise property values, Ravins now estimates an 8 percent tax rate increase may be required in 2031 in order to maintain reserves.

He said officials could offset this need even more with the $22.5 million the city received from the federal coronavirus relief program, the American Rescue Plan.

Department heads are now reviewing possible uses for the funds, which must be allocated by 2024, Ravins said.