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Dunedin set to lower its property tax rate

City staffers had recommended against lowering the rate, predicting leaner times. But even with a lower rate, homeowners might not pay less.

By VANESSA DE LA TORRE
Published July 26, 2006

DUNEDIN - Elected officials went against city staff recommendations and decided to pursue a lower property tax rate.

The Dunedin City Commission has voted to tentatively lower the city's property tax rate to $4.29 for every $1,000 of assessed taxable value. That's a bit less than the current 4.425 millage rate.

But thanks to swelling property values, that doesn't necessarily mean a lower tax bill.

Consider this example: Someone owns a $176,462 house with a $25,000 homestead exemption. This year, their city tax bill was $670.22.

Now let's assume that the home's assessment has increased 3 percent for next year. That's the biggest jump possible under the Save Our Homes cap. Even with the proposed lower millage rate, the property owner will get a city tax bill for $672.87.

The difference equals the price of a six-pack of soda.

City staff had recommended that the millage rate stay the same, said finance director Sandy Sanders. Though taxable property values reached $2.35-billion in Dunedin, a 17 percent jump from last year, there may be less prosperous times ahead for the city.

Across the country, analysts are anticipating a slowdown of the real estate market, Sanders said. And Dunedin now faces higher fuel and energy costs, and rising health and property insurance rates - problems affecting municipalities and residents alike.

"We have a lot of challenges this upcoming year," Sanders said.

At their meeting last week, city commissioners thought residents deserved a cut - with caution.

As the city presented its $83.7-million budget, it included a 9 percent increase in law enforcement costs and a small increase in water and sewer impact fees, which city commissioners recently voted to raise for the first time in eight years.

And notably, there was the $300,000 surplus.

Dunedin should give taxpayers relief when given the opportunity, since the state Legislature and oil companies won't, City Commissioner Julie Scales said.

On the other hand, Scales said, "we all know Florida is the story of boom and bust."

"I don't think we are going to have 17 percent in the future," said Vice Mayor Dave Eggers, referring to the increase in property values.

Between now and the final budget hearing on Sept. 21, city commissioners can decide to lower the tentative millage rate even further.

Sanders, the finance director, would not recommend that.

He said lowering city property taxes beyond the proposed 4.29 mills would create a cash flow deficit, a scenario that would mean reducing city programs or services.

The tentative rate was enough to maintain a stable cash flow. But, he added, "we're looking at a projected decrease in reserves over the next two years."

Any changes to the property tax rate would take effect in October.

Vanessa de la Torre can be reached at 727 445-4167 or vdelatorre@sptimes.com.

[Last modified July 25, 2006, 22:32:25]