The city commissioners say a higher rate will result in city coffers filled with money not needed now.
By MEGAN SCOTT, Times Staff Writer
Published September 9, 2005
DUNEDIN - Commissioners Dave Eggers and Bob Hackworth pushed Thursday to lower the property tax rate, and when their proposal was defeated, voted against the entire budget.
"Our charge is not just to bank the people's money," said Hackworth. "I would not be able to support the recommended millage rate because it collects more money than it needs."
At a first hearing of the budget, commissioners tentatively approved keeping the property tax rate at $4.43 per $1,000 of assessed taxable value.
Hackworth and Eggers wanted to decrease the rate because Dunedin has an extra $500,000 in its reserves.
Fiscal policy states the general fund should maintain a minimum of 15 percent of its balance in its reserves. The 2005-06 budget has close to 24 percent.
"I think the evidence is clear that we have more than enough money to fund our current operations," said Hackworth, who recently announced his candidacy for mayor. "Our current reserves dramatically exceed our stated minimum reserve levels.
"There is no justification for collecting more money than we need to run our operations."
Budget director Dan Zantop tried to show that even at the current rate, reserves could fall below their required level in two to three years.
While Dunedin saw a 13 percent increase in property values this year, that rate might not continue, he said.
"We could be nearing the end of this housing boom," he said. "Next year, we could drop down to 9 percent. We can't always count on these large increases. After 9/11, we saw big spikes in property insurance costs."
Reducing the tax rate would have amounted to little saving for residents, said Zantop. A 6 percent decrease would mean residents would save 67 cents a week.
Eggers, who is seeking re-election, maintained that the move would send residents a message.
The other three commissioners, however, sided with Zantop's assessment, citing the rising costs of fuel, construction materials and property insurance.
"I would like to think we have a nice cushion to take care of ourselves," said Vice Mayor Julie Scales. "I don't want to sacrifice the well-being of our citizens for a short-term benefit. I am looking at the long term, not today."
But Hackworth said he didn't believe Zantop's projections, which were based on 3 percent additional annual revenue. In previous years, he said, revenues increased 7 percent.
He wanted the tax rate returned to $4.11 per $1,000, the rate before commissioners voted to increase it in 2003.
"These projections and forecasts may be dramatically understated," Hackworth said. "I understand you don't want to be overly optimistic, but you can't be overly conservative."
Eggers and Hackworth said if the city wouldn't reduce the tax rate, it should use the surplus to help residents with a community project, lowering water and sewer rates, or an affordable housing trust fund. They voted against the budget because it did not include those provisions.
Final approval of the budget and millage rate will be Sept. 22. The budget goes into effect on Oct. 1.
