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Small town budgets will have to shrink to fit lower tax revenues

The beach communities are still calculating the full effect of the state cuts.

By CRISTINA SILVA
Published June 20, 2007

They were the haves, and now they are the have lesses.

Some of the smallest communities along Pinellas County's coastline will be among the hardest hit by property tax legislation passed in Tallahassee last week.

Of the Pinellas municipalities that will have to cut their property tax revenue by 9 percent, the majority are small beach communities that heavily depend on ad valorem taxes.

While the rollback translates to multimillion-dollar losses for Clearwater and St. Petersburg, smaller towns, which can only cut so much from already tiny budgets, could stand to lose the most in services that affect quality of life.

All municipalities could face deeper cuts if voters approve a constitutional change that would offer "super" homestead exemptions for homeowners.

In the meantime, officials are trying to figure out the impact on next year's budgets.

"What we are trying to do is to ensure that what we have in the budget is absolutely essential, " said Treasure Island City Manager Reid Silverboard.

In recent years, many small beach communities benefited from the highest property appreciation in the state. In those flush times, they chose to either save the extra money or initiate attractive programs and projects that weren't absolutely necessary, but still benefited residents, officials said.

In Indian Shores, the town moved forward with a water management plan to address flooding on Gulf Boulevard, its main thoroughfare.

Redington Shores earmarked thousands for a rainy day savings account. In Treasure Island, officials contemplated a new downtown development project and invested in infrastructure.

"These were projects that were in the nice-to-have category, " said Indian Shores Mayor Jim Lawrence. "They were things that could have been put off for the future but we didn't while we had the excess funds."

Now, officials are debating where to cut corners.

North Redington Beach stands to lose at least $40, 000 in property taxes in the upcoming year.

It may not sound like a lot, but that paltry sum makes up 5 percent of the town's total $780, 000 budget.

The town of 1, 550 residents only has four town employees, making layoffs and hiring freezes an impractical money-saving solution. Instead, the town will consider eliminating events such as parades and its Fourth of July celebration.

"This is not going to kill us, " Mayor Bill Queen said. "But we are going to have to cut back on the extracurricular activities that kind of make the town unique."

Silverboard, the Treasure Island city manager, said his city will have to consider making up the difference with new revenue sources such as increasing utility taxes, rather than cutting services to its 7, 400 residents.

The initial impact to Treasure Island will be about $425, 000 in reduced property tax revenue, or 5 percent of the city's $8.6-million general fund, he said.

The city has put all future projects on the back burner, including the downtown redevelopment plan, which could be essential in bringing more tourists and businesses to the area.

Indian Shores, with about 1, 800 residents, stands to lose about $160, 000 in property tax revenue, or about 5 percent of its total $3.6- million general fund budget.

"I think we are going to be okay, " Lawrence said. "Most budgets can find 10 percent to get out and not suffer too much."

How the tax rollback will affect local beach communities

 

 

SOURCE: Times research; U.S. Census

Municipality	Population	Percent tax roll back	Property tax generated revenue lost	Total general fund revenue	Percent of general fund affected
Belleair Beach	1, 628	9%	$108, 035.64	$2, 465, 758	4%
Gulfport	12, 500	9%	$330, 570.90	$22, 202, 899	1%
Indian Rocks Beach	5, 200	5%	$90, 874.20	$3, 124, 519	3%
Indian Shores	1, 756	9%	$160, 944.12	$3, 559, 619	5%
Madeira Beach	4, 529	9%	$224, 321.13	$8, 404, 185	3%
North Redington Beach	1, 555	9%	$39, 049.02	$777, 452	5%
Redington Beach	1, 609	9%	$79, 809.66	$1, 895, 511	4%
Redington Shores	2, 435	9%	$94, 830.39	$2, 589, 027	4%
St. Pete Beach	9, 960	9%	$652, 783.05	$15, 202, 665	4%
Treasure Island	7, 369	9%	$425, 458.17	$8, 588, 750	5%
Clearwater	101, 830	7%	$3, 885, 437.29	$121, 902, 700	3%
St. Petersburg	248, 232	5%	$5, 379, 825.30	$223, 657, 000	2%

[Last modified June 20, 2007, 02:02:01]