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Amendment 1 puts budget shortfalls on the horizon
Just one day after the election, the tax measure is already bringing up tough questions for city officials looking toward the financial future.
By JODIE TILLMAN, Times Staff Writer
Published January 31, 2008
NEW PORT RICHEY - Now that voters have approved statewide property tax cuts, the city faces this question: How should it cut at least $431,500 from next year's budget?
That figure is what city officials expect to lose in property tax revenue due to the doubling of the homestead exemption and the $25,000 exemption on tangible property.
Finance Director Rick Snyder said the 7 percent decrease in revenue would be equally shared between the general fund and the redevelopment fund. Total spending in the current year, which also includes public works services funded by fees rather than property taxes, is about $44-million.
Officials, who have a hiring freeze in place, do not expect layoffs or major service cuts. But there could be some tough decisions, especially given that taxable property values could drop this year.
"It's what are our needs vs. what are our wants," said Snyder. "We may have to scale back a few of those wants."
One possible "want"? Eliminating yard debris pick-up, which would save nearly $200,000, Snyder said. City officials proposed that cut last year, too, but council members declined to make it.
City department heads also will be asked to present essentially flat budgets, said Snyder.
What may make that task harder than it sounds, he said: Officials will have to take into account staff raises the council has already approved.
Amendment 1 also will allow homeowners to transfer accrued tax benefits under Save Our Homes to a new home. Snyder said it's still unclear how portability will affect the city.
Council members on Wednesday said they were confident that New Port Richey residents wouldn't see a decline in services.
Council member Rob Marlowe said the city could consider paying less for neighborhood street paving projects, which are split between the city and benefiting property owners. Beyond that, he could not think of additional obvious cuts.
"I don't think there's anything I'd categorize as 'fat,'" Marlowe said. But "the economy is down. We need to make adjustments accordingly."
"We're actually in pretty good shape," said Deputy Mayor Ginny Miller.
Always a possibility: The city could raise the tax rate to make up for the lost revenue.
In New Port Richey, raising the tax rate by one mill - $1 of tax for every $1,000 in taxable property - would supply the city with nearly $874,000 in tax revenue.
"Politically, I don't think that would get three votes," said Snyder. "That's something I'm not planning on."