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City to trim property tax rate, still get $52M

Skyrocketing property values in Clearwater will help cover the city's higher fuel and insurance bills.

By VANESSA DE LA TORRE
Published July 22, 2006

CLEARWATER - Good news for residents: City officials want to lower the property tax rate - slightly.

Good news for the city: Thanks to ballooning property values, the new rate will still rake in $52-million next year, a $7-million jump from this year.

As proposed, homeowners will pay $5.42 for every $1,000 of their assessed property value. That's slightly less than the city's current 5.75 millage rate.

For someone who owns a $143,000 house and has a $25,000 homestead exemption, this year's city tax was about $679.

If the home's assessment has increased 3 percent for next year, the proposed lower tax rate would mean a city tax bill of about $663.

That's if the assessment is limited by the Save Our Homes cap. But the assessment - and the tax bill - could go up if the home changed hands within the last year.

City Council members set the proposed millage rate Thursday night. If approved in September, the decrease will be the first since the early 1990s.

The proposal comes as the city presents its $399-million budget for the upcoming fiscal year. As always, property taxes make up the largest chunk of the city's general fund revenue, followed by franchise and utility taxes. And police, the fire department, and parks and recreation are the places where most of the general fund is spent.

Here's the unusual bit: Taxable property values have risen to $10.6-billion, a $2-billion increase from this past fiscal year. Compare those figures to a year like 2002, when the total was $5.7-billion.

"It's economic redevelopment, increase in waterfront property values," said City Manager Bill Horne. "It just seems that everybody is selling their property for some good prices."

But along with the hot real estate market - and the bigger cushion to the budget - are the rising costs of property and liability insurance, fuel and energy.

"The things that people are dealing with personally, are affecting cities," said Clearwater City Budget Director Tina Wilson.

Because of hurricane concerns, the city's insurance rates have skyrocketed by more than 100 percent and are budgeted at $4.4-million in the new fiscal year. Meanwhile, gas prices and energy bills have increased at double-digit rates across the city's fleet and facilities, and are estimated at $2-million, Wilson said.

General fund reserves are expected to be $15-million, which city officials consider a "comfortable" amount.

"So yes, we are lucky to have these revenues," Wilson said of the property taxes. "But are we trying to spend it all? No. We are trying to be as fiscally responsible as we can. We're not adding any new programs, not adding new people."

The budget includes just three new firefighter positions.

A public meeting to discuss the budget is scheduled for Aug. 21, followed by two public hearings in September. The budget and new millage rate would take effect in October.

PROPERTY TAXES IN CLEARWATER

As proposed, Clearwater homeowners will pay $5.42 for every $1,000 of their assessed property value. For a homeowner with a house assessed at $147,290 and a $25,000 homestead exemption, the proposed rate would mean paying $663 for the city portion of their 2007 property tax bill. Here's how the rest of that bill breaks down:

School Board: 37 percent

County: 26 percent

Clearwater: 24 percent (5.42 Mills)

Other agencies: 13 percent

- PROPOSED GENERAL FUND EXPENSES

Police: $35.6-million

Fire: $22.7-million

Parks and Recreation: $22.6-million

Public Works: $10.4-million

Other departments: $32.3-million

Total: $123.6-million

- Property taxes are the biggest source of revenue for the general fund. Other city functions, such as water, solid waste and wastewater service, are paid for by customers of those departments.

[Last modified July 21, 2006, 21:04:31]