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Building boom could erase tax worry

Published June 13, 2007


Tax cut - what tax cut?

Thanks to Pasco County's building boom, cut-hungry state legislators could fail to stop the county government from increasing property tax coffers, at least next year.

While other counties and cities face blunt budget carving, Pasco could use new construction added to its tax base to increase its general fund next year, County Commissioner Ted Schrader said Tuesday after discussions with county staffers.

Their estimate is $162-million could be received, an increase over the $154-million in property taxes this year to cover services like policing and libraries.

If that happens, they can thank recent builders and buyers.

Pasco added $2-billion to the tax base as of Jan. 1, according to an estimate by property appraiser Mike Wells. The new tax revenue off that property would provide the increase.

It makes the latest projection in a series of uncertain proposals for next year more palatable in a county with a budget of $1.1-billion in 2007.

"It's certainly doable, " Schrader said. "I think it shows the proactiveness of the Board of County Commissioners of cutting the millage rate."

The county's tax rate has dropped by a third since 2001, although building and rising property values actually have boosted revenue. Expansive property taxes across Florida have led lawmakers to have a special session on tax cuts.

Legislation unveiled Tuesday actually would reduce property taxes for the general fund by $5-million below what's possible under the current system, county officials said. That's because Pasco would have to cut 3 percent of its current tax revenue under a complicated proposed formula based on population and tax growth.

That complexity frustrated city officials in Pasco trying to calculate what they would lose.

"We're a little worried, " said City Manager Steve Spina of Zephyrhills, which faces a 5 percent slash to taxes this year. "But I'm not exactly sure what they're doing. That's the problem."

But the bigger worry is a future wound. Increased homestead exemptions, if a constitutional amendment passes, could cause a $24-million cut to Pasco in 2009.

Schrader said it would be "devastating."

"I'm not sure where you begin to cut that, " he said.

During a conference call Tuesday afternoon, city managers in Pasco scratched their heads over the shifting estimates of cuts and sketchy details of the reasons behind them.

The deepest hit was San Antonio, which has to drop 9 percent of this year's property taxes. Nearby St. Leo would have no percentage cut into this year's revenue. What gives? Better yet, who gets?

The city officials ended 30 minutes of discussion still looking for answers, starting in New Port Richey.

The funding formula based on growth and tax revenue would mandate no percentage cut there, according to legislative reports. By comparison, neighboring Port Richey would be hit by a 7 percent rollback off existing taxes.

One difference is that New Port Richey has a citywide redevelopment area that draws almost half its $6-million property taxes. Those collections are not supposed to be part of the Legislature's calculations of mandated cuts, said Greg Giordano, an aide to state Sen. Mike Fasano, R-New Port Richey.

The Legislature's projections would produce a $130, 000 cut in New Port Richey, which had a $63-million budget this year.

In Port Richey, City Manager Jerry Calhoun estimated the cut will be $170, 000. The city's budget this year: $12.4-million.

"We haven't even attempted to come up with their science, " New Port Richey budget director Rick Snyder said. "We were as surprised to see this as anyone."

Like other governments preparing for starker cuts, New Port Richey officials already were planning to collect $460, 000 less in property tax revenue for next year, which would be deeper than lawmakers demand.

Calhoun said Port Richey was planning to cut deeper than the lawmakers propose, too. Park improvements likely will be put off, for example.

"The state is mandating it, but we were going to do it anyway, " Calhoun said. "We were one of the fortunate ones, so I figured out a way to do that so we won't have to cut services."

In Dade City, where budget woes have dogged leaders for years, the main concern is fallout from proposed hikes by lawmakers to the state's $25, 000 homestead exemption.

The city would face a 7 percent slice in its property tax revenues. Much of that could be absorbed by leaving jobs vacant and other relatively painless measures, City Manager Harold Sample said.

"The real thing that everybody's concerned about is for them to put into play these super - and they're calling them super - exemptions, " he said.

Times staff writers Molly Moorhead and Camille Spencer and correspondent Mindy Rubenstein contributed to this report. David DeCamp can be reached at 727 869-6232 or

[Last modified June 12, 2007, 21:51:14]

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