St. Pete Beach eyes 12% tax increase
By SHEILA MULLANE ESTRADA
© St. Petersburg Times,
ST. PETE BEACH -- Property owners could face a 12 percent increase in their tax bills next year under a tentative tax rate set Tuesday by the City Commission.
The actual rate will not be decided until September, when the city budget is approved. The commission will begin its budget deliberations next month.
Anticipating a public outcry, City Manager Carl Schwing repeatedly stressed that the likely tax increase is not a result of the construction of a new city hall.
"There may be some who believe that this rate increase proposal has some connection to the new city hall. This, of course, is not true. The city hall has no relation to the proposed increase," said Schwing, explaining that the construction is funded by Penny for Pinellas capital improvement money.
"For the last several years, we have been able to hold the millage rate unchanged. This year, based solely on personnel requests from my department directors, I do not have that confidence," Schwing said. "I am in the uncomfortable position of saying that the millage rate might go up. A 12 percent increase might be required."
Florida law requires municipalities to project the highest possible property tax rate by midsummer. That rate can be reduced in the final budget but cannot be increased.
Schwing is proposing to increase the property tax rate to 3.1333 mills to produce an additional $400,000 in revenue for the city. Those funds would be needed to maintain current operations and pay for additional personnel, he said.
Currently, St. Pete Beach property owners are levied 2.8 mills for general fund expenditures. An additional small amount is levied for debt reduction and fluctuates each year according to the amount of remaining debt and prevailing interest rates.
"Unfortunately, because of timing issues, we have been unable to work through the budget to determine if this proposed increase is even necessary," the city manager said, stressing that the city has not raised its property tax rate since 1997. The current rate of 2.8 mills ($2.80 per $1,000 of taxable property) is the highest amount since 1987, when the rate was set at 3.6863 mills.
Schwing said the proposed increase, plus the city's existing debt service, would cost a property owner about $74 annually for a home valued at $250,000, minus the homestead exemption.
The proposed rate increase is a "worst-case scenario," according to Schwing. "If the commission chooses to add personnel and not increase property tax rates, this would mean we would have to find places to cut."
The Fire Department has requested six additional firefighters, while the Police and Parks departments are asking for nearly four additional staffers. Personnel costs now represent bout 60 percent of the city's yearly budget.
"This won't be the first time that we go out with a higher tentative rate. We need to bring some of these issues -- quality of life issues -- to our residents," said Mayor Ward Friszolowski, while urging residents to attend the commission's budget workshop sessions, scheduled for August.
At a workshop at 7 p.m. July 16, department heads are scheduled to present their wish lists for new personnel to the commission.
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