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By BRIDGET HALL GRUMET, Times Staff WriterBoth sides of the proposed sales tax hike offer formulas to calculate its cost. But the number of variables make it a very personal equation.
BAYONET POINT - Shirley Petre figures it's not that much money.
The extra 1-cent-on-the-dollar sales tax, if approved by voters March 9, might cost her about $96 a year. That's assuming she spends about 40 percent of her pension and Social Security check on items subject to the sales tax (food and medications, among other items, are exempt).
"That really wouldn't bother me," said Petre, a 65-year-old retired real estate agent who just moved to Beacon Woods. "If they need the penny, they need the penny."
But the spare change adds up for others, such as retired delivery truck driver Dean Lugo. The 72-year-old Port Richey man just gets by on Social Security, and the extra sales tax could total $30 or $40 a year for him.
"Taxes are going up all the time, and penny by penny, it adds up," Lugo said. "You take every dollar and try to stretch it as much as you can."
Officials tout the proposed Penny for Pasco as the best way to pay for new schools, improved roads, environmentally sensitive land and city projects. They even threw in the promise of a half-mill property tax cut from the School Board if the sales tax passes - a $19 savings for Petre, for example, based on the taxable value of her non-homesteaded condo.
But the bottom line for some residents remains: How much is this going to cost?
Answering that question is not an exact science. It depends on how much people spend on taxable items, and that varies from person to person.
In a memo estimating sales tax costs for the average Florida family, the state House of Representatives Finance and Tax Committee says "it is possible to hypothesize" that people spend roughly 40 percent of their income on sales-taxable items.
For the average Florida family making $67,000 a year, a 1-cent sales tax increase would cost $268 a year, the committee estimates.
That methodology isn't perfect, however. The number might be closer to 30 percent for lower-income retirees, or 50 percent for more affluent families, said Allen Altman, co-chairman of the Pasco's Citizen Committee promoting the sales tax.
"You have somebody that is a saver vs. somebody that eats out a lot," Altman said. "Somebody with a certain income, depending on their lifestyle, could pay more or could pay less."
The $268 estimate also reflects the state sales tax, which is not capped on large purchases, he said. By contrast, the local-option sales tax, such as the Penny for Pasco, would only apply to the first $5,000 of a big-ticket item like a new car, Altman said.
And there's another variable: If you do some of your shopping in Hillsborough or Pinellas counties, you're already paying a higher sales tax on those purchases. So your increase under the Penny for Pasco would just be on the items you buy here.
At a televised workshop filmed Feb. 17, Commissioner Steve Simon offered a drastically lower estimate for fixed-income seniors. After subtracting the cost of rent or a mortgage, car payment, food and medications, Simon said a frugal retiree with an annual $15,000 income would spend only $150 a month on taxable items. That comes out to $1.50 of extra sales tax per month, he said.
But critics quickly dismissed those calculations.
"He just pulled those numbers out of the air," said sales tax opponent Bill Bunting.
The proposed Penny for Pasco would raise about $437-million over the 10-year life of the tax, with about a quarter of that paying for the half-mill property tax cut from the School Board.
The county and the school district would then each get 45 percent of the revenue, and the cities would split the rest.
Although it coincides with the Democratic presidential primary, the sales tax referendum is open to all voters regardless of party affiliation.
Voters naturally consider their pocketbooks when scrutinizing tax increases, said Keith G. Baker, senior vice president and chief operating officer of Florida Tax Watch, a nonprofit watchdog group in Tallahassee. But it can be hard to quantify how much a sales tax increase costs in the long run, he said.
"With property taxes, you see them in graphic form when you get the property tax bill, and you see how it affects you," Baker said. "With a sales tax, people grow accustomed to paying a little bit at a time."
That doesn't mean voters are frivolous with their pennies, however.
"Unless they have a lot of zeal about where the money is going and a feeling that the revenue is necessary, people typically don't like to be taxed above what they're paying," Baker said.
- Bridget Hall Grumet covers Pasco County government. She can be reached in west Pasco at 869-6244 or toll-free at 1-800-333-7505, ext. 6244. Her e-mail address is bhall@sptimes.com