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After 11 years without a rate bump, officials say one is needed for big-ticket items and higher insurance and pension costs.
By KELLEY BENHAM, Times Staff Writer
© St. Petersburg Times, published March 18, 2003
LARGO -- The city has avoided raising the tax rate for 11 years, but Mayor Bob Jackson thinks this is the year that streak ends.
"I fully anticipate some sort of an increase," Jackson said.
Commissioners expect to approve a budget that will support rising salaries and a computer system for police cars, while compensating for soaring insurance costs and pension shortfalls.
The property tax rate has stayed the same since 1992. It's the third lowest among the 25 cities in the state of similar size. At the current rate of $3.40 per $1,000 of assessed value, an owner of a $150,000 house with a standard $25,000 homestead exemption pays the city about $425 a year.
The city has come close to raising the rate several times in the past decade, but it has always backed down.
"One of these years we're going to have to do it," Commissioner Pat Gerard said.
Without a tax rate increase, revenues usually rise anyway because property values go up and the city annexes more land from the county.
"We really don't want to raise taxes," Jackson said. "We want to keep the incentive for annexation."
But this year, the city faces several unprecedented big-ticket expenses, City Manager Steven Stanton said.
The Police Department has been asking for computers for its police cars for years, and now has a $1-million federal grant to help pay for them. The community and commission seem to want to find the rest of the money, which could be as much as $3.5-million, he said.
"That's the one that will be the budget breaker," Gerard said, "and no one wants to say no to it."
The city also has to contribute $1.2-million to the police and fire retirement plan to make up for disappointing stock performance.
And it is paying for last year's staff raises, which averaged 7 percent. The city hoped to use the raises to retain employees -- particularly police officers, who were leaving for better-paying departments.
The new library is expected to cost $700,000 a year to operate, but that cost won't kick in right away so it doesn't demand an immediate tax increase.
"The one thing you can't blame it on is the library," Commissioner Charlie Harper said. "It's not even built yet."
Stanton recommended tax increases this year and next year in a letter to commissioners outlining proposed construction projects. The city has never had to contribute so much to a pension plan in one year, has never spent as much for a single system as it probably will for the police computers and has never built a building as big as the library in any one year, he said.
The commission is considering a number of capital improvement projects for the next five years. It will go through the list at next Tuesday's work session, decide which projects are most important and talk about how to pay for them. The list includes the police computers and an expansion of the reclaimed water system.
Before it decides to raise taxes, the commission will talk about cutting expenses, Harper said. But he said, "It will take a lot of cuts to avoid a tax increase."
"The city is not what it used to be," he said. "The city does a lot more for the citizens than it did 10 years ago."
Residents seem to like the additional services and believe they are getting a good deal, Stanton said. In community meetings, they don't ask for their services to be cut so they can save money, he said.
The commission has a lot of flexibility in deciding what it wants to offer and what it is willing to pay for, Stanton said.
"Is this the year? I don't know," he said. "There is plenty of time for deliberations and public input.
"Either way, the city is in control of its own ship."