Hillsborough freezes hiring, considers new taxes after lawmakers okay tax cut referendum

The county would have to cut or make up $30.6 million a year if voters approve an additional $25,000 homestead exemption.

Hillsborough County administrator Mike Merrill
Hillsborough County administrator Mike Merrill
Published May 9 2017
Updated May 10 2017

TAMPA — The same day Florida lawmakers agreed to put a property tax cut on the 2018 ballot, Hillsborough County administrator Mike Merrill told staff to freeze all hiring immediately.

In a May 2 memo obtained by the Tampa Bay Times, Merrill told his top lieutenants not to fill openings or promote internally "to allow greater flexibility and options" in upcoming budgets.

The fast fallout in Hillsborough from the property tax decision could be a sign of things to come statewide as cities and counties grapple with the prospect of losing millions every year in property tax revenue.

Hillsborough, for example, would have to cut or make up $30.6 million a year if voters approve an additional $25,000 homestead exemption.

"We're anticipating it will pass," Merrill said. "And we need to start taking action."

Under the referendum, the value of a home between $100,000 and $125,000 would be exempt from property taxes, saving Hillsborough homeowners about $270 a year.

Pinellas County faces a first-year loss of $33.8 million, according to the Florida Association of Counties, which included the impact on other Pinellas taxing authorities. Pasco County would feel a $13 million hit, the association said, while Hernando County would have to make up $2.8 million.

So far, Hillsborough — which has 4,800 full- and part-time employees — is the only government in the region to take concrete steps to address future budget shortfalls.

At a Pinellas County Commission meeting Tuesday, administrator Mark Woodard said it would be premature to act as though the property tax referendum's outcome is certain. In 2008, a similar $25,000 extension passed with two-thirds of the vote.

In any case, Woodard said, it would be unfair to start taking away services now.

Pasco County Commission Chairman Mike Moore said last week the county needed to carefully review any new spending proposals that would affect budgets beyond 2018. But county officials have not discussed a hiring freeze, retiring County administrator Michele Baker said Tuesday.

To the contrary, county staff members asked commissioners last week to consider hiring new firefighter/emergency medical technicians and other fire department employees, and additional librarians and bus drivers in the fiscal year starting Oct. 1. Likewise, Pasco Sheriff Chris Nocco requested 14 new employees as part of his $118 million budget proposal to the commission.

Hillsborough was already facing difficult decisions in the coming years.

The county needs $334 million by 2022 to pay for upgrades to its stormwater system and to fully fund master plans for the parks and fire rescue departments, county staff told commissioners during a budget workshop Tuesday.

A growing portion of the county's future revenue — more than $800 million over the next decade — has already been set aside for transportation needs.

"Not to be an alarmist," said Commissioner Ken Hagan, "but it certainly seems a perfect storm is brewing."

Commissioners said they are open to considering a menu of targeted tax increases and fee hikes to make up the budget gap.

A property or sales tax surcharge seems unlikely for now, but there was appetite to consider a 1 cent increase in the gas tax. Unlike many large local governments, Hillsborough does not tax utilities. Commissioners said that they may consider implementing a charge of up to 10 percent.

Cuts are on the table as well, but Commissioner Sandy Murman said county departments are still emerging from the recession.

"I don't know how much more we can cut, quite frankly," Murman said. "We're already at the bone."

Commissioner Victor Crist warned against raising rates too much, fearing retaliation from lawmakers who clearly want to see local taxes lowered.

"If they see local governments circumvent that by readjusting the tax rates on everything else," Crist said, "they're going to bite us."

Times staff writers Mark Puente and C.T. Bowens contributed to this report. Contact Steve Contorno at scontorno@tampabay.com or (813) 226-3433.

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