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Cut taxes prudently

The public understandably agitates for lower taxes, but officials should keep in mind that property values are already starting to retreat.

Those who will agitate tonight for cutting property taxes are right that surging real estate values have been a boon to Pinellas government. But as they respond to the demand for further lowering the property tax rate, the elected county commissioners who are charged with making life better for 950,000 residents need to keep the big picture in mind. Budgets require calibration, reason and foresight - something that politicians typically lose when they play to an emotional crowd.

After taxpayers complained that the county wasn't lowering its tax rate enough, the commissioners directed County Administrator Steve Spratt to come up with more options for a deeper cut. At a second public hearing tonight, Spratt is offering a revised 2006-07 spending plan that ably balances the county's service needs with a 10.3 percent cut in the tax rate. He proposes reducing tax rates to the lowest level in 15 years - from the current $6.80 to $6.10 per $1,000 of taxable value. That is a half-mill cut in the rate originally proposed, for a total cut of slightly more than seven-tenths of one mill. Spratt takes another $35.7-million out of the budget, cushioning the impact by pulling more than half of that amount - $19-million - from reserves. Those reserves, thanks to the fiscal prudence of previous commissions, would still provide an acceptable cushion. But tapping reserves is not a long-term answer to easing the property tax squeeze, and this should be a rare occurrence.

Straightforward math and political reality mean even these substantial cuts won't satisfy everyone. City and county officials across the state this year have become a punching bag for families and businesses that are being knocked around by powerful economic forces. Property insurance rates are soaring, gas prices have climbed, mortgage rates are on the rise, and escalating home values are pricing teachers and police officers out of many communities.

Even within the arena of property taxes, the anger derives more from inequity and shell games than from tax rates that generally have been stable. The Save Our Homes exemption has dramatically redistributed property taxes, so that apartment dwellers, business owners, the owners of second homes and new homeowners feel the full impact of soaring property values on their tax bills while homesteaded property owners are protected. At the same time, state lawmakers keep pushing costs onto local property taxpayers, whether for education or juvenile detention. This year, lawmakers who boasted about eliminating a state intangibles tax on affluent stockholders neglected to mention that property taxpayers will be forced to make up some of the difference because a portion of those tax dollars was shared with local governments.

Commissioners need to remember tonight that they hire a professional manager for just such occasions. Spratt, in his revised budget plan, provides a tax rate cut that is more than the token decreases being offered in many other counties. More importantly, he puts the debate in a broader context. He understands that people also want more deputies in the street, fewer traffic bottlenecks and greater recreation opportunities for families. He also knows that property values already are beginning to slow, and the county's revenues for next year's budget won't rise nearly as much.

"Let's make sure," Spratt says, "we have an eye on the future."

Counties have become a flashpoint this year for a host of economic ills, and Pinellas commissioners can't lose sight of their broader responsibilities. The revised budget before them is reasonable, responsive to taxpayers and sends a message to Tallahassee that the county is no spendthrift. It deserves the commissioners' support, and any spur-of-the-moment attempt to cut even deeper would be irresponsible.

[Last modified September 18, 2006, 23:17:32]