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Dunedin considers lowering tax rate

In a strong budget year, one official wants a 7.5 percent reduction and another a 6 percent decrease.

By MEGAN SCOTT
Published July 20, 2005

DUNEDIN - Here's something you don't see very often.

Because Dunedin's finances are in such good shape, two commissioners want taxpayers to pay less money.

Commissioners Bob Hackworth and Dave Eggers have proposed reducing the property tax rate, which is $4.425 per $1,000 of assessed taxable value.

Hackworth wants a 7.5 percent reduction. Eggers, a 6 percent decrease.

"We have more revenue coming in than we need based on the current millage rate," said Hackworth. "You're only supposed to collect as much as you need. I think we would be collecting more than we need."

This budget year has been markedly different from previous years.

In 2003, city officials wanted to increase the tax rate 15 percent to cover a potential budget shortfall.

Commissioners ended up approving a 7.5 percent hike, even though they were warned another increase would be necessary within the next few years.

Last year, Eggers and Hackworth voted against the budget because Dunedin had to borrow $562,000 from reserves to balance it.

None of those things are an issue this year.

The proposed 2005-06 budget was balanced without using money from reserves, which are healthy.

Fiscal policy states the general fund should maintain a minimum of 15 percent of its balance in its reserves. One reason for the tax rate hike in 2003 was that city officials were worried Dunedin would dip below that minimum.

The general fund in this budget has close to 21 percent in reserves.

"This is maybe one of the best budget cycles I have been through," said City Manager John Lawrence, who has been city manager for more than 20 years.

But reducing the tax rate does not make good financial sense, said finance director Sandy Sanders.

He said certain things occurred this year to help Dunedin financially, such as a 13 percent increase in property values.

The city also saw an 8.5 percent decrease in its contract with the Pinellas County Sheriff's Office.

Those things may not occur next year, he said.

"A couple of things happened this year that were extraordinary," he said. "We don't want to put ourselves in the position of one year asking for more millage and the next year reducing millage. Our goal is to keep an average tax rate for our citizens."

Such a yo-yo effect is insulting to the community, said Sanders. He added that Dunedin still has one of the lowest tax rates in the county.

"I would think residents would be happy to see a millage decrease, but they wouldn't be happy if you have to come right back and ask for an increase," he said.

But Eggers, who is seeking re-election next year, disagreed.

"Our folks will never like a tax increase, but they certainly will be more understanding if, when you had an excess, you had a tax rate cut," he said.

Hackworth, who is planning to resign from the commission to run for mayor next year, is convinced that Dunedin does not need the extra money.

He plans to introduce a motion to reduce the property tax rate at the public hearings in September.

"Our job is to only collect as much as we need," he said. "I don't think we have any divine right to collect more than we need. You need to fund the level of service you have identified as appropriate, and fund adequate reserves."

Public hearings for the budget are Sept. 8 and 22. The budget goes into effect Oct. 1.

Megan Scott can be reached at 445-4167 or mscott@sptimes.com

[Last modified July 20, 2005, 00:57:15]