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Cities honing budget axes

Passage of Amendment 1 will mean drops in tax revenues throughout the county.

By MIKE DONILA, Times Staff Writer
Published January 31, 2008


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Clearwater leaders again will look at shutting down libraries, canceling special events, slashing overtime pay and possibly cutting jobs.

And - after two years of reductions - they also could be looking at raising the tax rate.

The city is expecting to lose at least $2.7-million in property tax revenue because voters Tuesday night signed off on Amendment 1, a statewide initiative aimed at putting more money into homeowners' pockets.

But when combined with other factors, the hit to the city's coffers could be closer to almost $8.8-million.

At this point, city leaders say nothing is safe.

"All bets are off," said City Manager Bill Horne. "Anything could possibly happen."

Horne added that he expects in the next few days to enact a selective hiring freeze that will likely affect most positions except rank and file police officers and firefighters.

Horne and his staff expect to give the City Council a preliminary operating budget in June. But they will begin soliciting input from city leaders and the public much sooner.

Councilman Paul Gibson, who is wrapping up his first year in office, said he'd like to see the city create a zero-based budget where the city accounts for every dollar. He also wants to look at outsourcing operations and, if necessary, closing or consolidating facilities.

Gibson added that "it's unlikely we could achieve mass reduction" without cutting jobs. But he said it's too early to tell whether city leaders should consider a property tax increase.

Voters by 64 percent Tuesday approved Amendment 1, giving themselves a modest tax break. The plan is estimated to save taxpayers $9.3-billion over five years, money that would otherwise go to local governments.

But the potential loss of revenue doesn't stop there. Clearwater officials say they're bracing for even more drastic reductions because they expect taxable property values to fall between 5 and 10 percent this year, hits that could mean additional losses between $2.5-million and $4.8-million for next year.

Combine that with additional operating expenses for next year projected at $1.3-million and Clearwater leaders say they could be out somewhere between $6.4-million and $8.8-million in fiscal year 2008-09.

Pinellas County chief deputy property appraiser Pam DuBov said her office will give Clearwater an estimate on taxable property values in late May. She said her staff is still collecting data. She expects a drop in residential property values but doesn't know how much.

Newly re-elected Clearwater Mayor Frank Hibbard, who warned residents during his campaign that big cuts were coming, said he plans to hold public forums by early April to talk with residents about what and where the city should cut to continue to maintain quality services and public safety.

Last year, the city cut close to $4-million from its budget, eliminated some jobs - mostly through attrition - and services, consolidated the beach library and recreation center, reduced library operating hours and eliminated some landscaping initiatives.

"I want to make sure that no one area of the city is burdened more than other," Hibbard said. "If we're in this, we're in it together and the cutbacks need to be made uniformly across the city."

Hibbard declined to speculate on where he expects to cut or whether jobs would be on the chopping block.

Other city officials across north Pinellas have begun assessing the effects of Amendment 1 and trying to determine their next move.

In Largo, which is looking at losing about $3-million, City Manager Norton "Mac" Craig said the city may "put a soft freeze on selected job vacancies."

He added the city will hold a number of focus groups to gauge which services are most important to residents.

"No matter what people think, there's not a lot of fluff in the city of Largo," Craig said.

In Safety Harbor, where the loss is expected to be less than $500,000, interim City Manager Matt Spoor said "the impact won't be as great as in some neighboring cities.

"Is it going to hit us? Yes," he said. "But I don't expect any layoffs and I don't expect any major reductions in service."

Other city leaders are waiting before announcing any plans.

In Dunedin, where the hit is expected to be at least $800,000 to $1-million, city officials have declined to speculate on possible cuts.

Tarpon Springs Finance Director Arie Walker also declined to comment about the impact of the amendment and how officials will make up the loss, saying she's waiting for exact numbers from the property appraiser's office.

The approval of Amendment 1 means 2008 property tax bills will include an additional $25,000 homestead exemption on local government taxes, but not school taxes.

The average homeowner will see taxes drop by about $240 this year under the increased homestead exemption included in Amendment 1. In addition, and starting this year, homeowners also can carry accrued tax benefits under Save Our Homes to a new home, which could be worth thousands.

Amendment 1 also included a new $25,000 exemption on business property and a 10 percent annual cap on assessments, but it's expected to have little effect.

Staff writers Lorri Helfand, Eileen Schulte, Elena Lesley and Tamara El-Khoury contributed to this story.

Fast facts

Projected revenue loss from Amendment 1

Clearwater: $2.7-million

Largo: $3-million

Dunedin: $800,000-$1-million

Safety Harbor: $500,000

Tarpon Springs: Not available

[Last modified January 30, 2008, 22:14:28]


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