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Never mind about that zero property tax cut
Contrary to previous figures, New Port Richey may cut its tax rate 9 percent. Reserve funds would cover the cuts.
By JODIE TILLMAN
Published June 30, 2007
NEW PORT RICHEY - No state-mandated cut in the city's taxes next year? It sounded too good to be true.
Maybe it was, city officials have learned, as they scramble to get the proposed 2007-08 budget ready for Tuesday night's City Council meeting.
New Port Richey may face a 9 percent slash to its property tax rate, according to state Department of Revenue calculations based on the city's population and taxes in 2001 vs. 2006.
A 9 percent cut translates into a $225, 000 loss, said City Manager Scott Miller. That would come on top of reductions that city administrators have already made in preparing the budget for Tuesday, he said.
That budget anticipates cutting the millage rate from 7 to 6.5. A mill is $1 of tax for every $1, 000 in taxable property.
No city worker would lose his or her job, Miller said. If the city does need to cut an additional $225, 000, he said, the money would come out of a reserve account.
New Port Richey does not find itself in the position of Tampa or St. Petersburg, which have announced major layoffs. But dipping into reserves is hardly sustainable.
"Certainly going into savings is an option but not one that can be done on a long-term basis, " said council member Rob Marlowe.
Next budget season could bring the tough decisions. If voters approve a "super" homestead exemption next year, the city will be looking to cut $2-million, said finance director Rick Snyder.
Marlowe called that impact "fairly catastrophic, " predicting that basic city services - police, fire and library - would not go unscathed.
"This has the potential to be an absolute disaster, " he said.
Early estimates provided by the Legislature this month spared New Port Richey from any of the cuts that are based on a city's or county's history of spending. That came as a surprise: Even though the city kept the same millage rate for the past four years, rising property values have allowed officials to raise more money. Those soaring property values are what prompted the Legislature to propose a cap on local spending.
City officials say they never did understand why the Legislature's early figures put them at a zero percent cut. The 9 percent cut came to light this week when Snyder inserted New Port Richey figures - taxes and populations in 2001 and 2006 - into a formula put out by the Department of Revenue, which now has the calculator on its Web site.
Even with the increasing values, New Port Richey's general fund has been steady since 2001. That's because nearly all of the city is designated as a community redevelopment area, which means taxes generated by increases in property values after 2001 go toward redevelopment efforts.
Exactly how this designation affects the mandatory tax cuts remains unclear, Snyder said.
Snyder expects a definitive answer from the state by July 13. That will be just in time for budget workshops beginning July 17.