CLEARWATER - Pinellas County leaders must decide if they will support County Administrator Bob LaSala's proposal to raise property taxes for 2014, even as other local communities are keeping tax rates flat.
LaSala is proposing a 5-percent hike in the county's general fund tax rate and an 8-percent increase in the tax rate for emergency medical services. The county must take steps to address a $9-million budget shortfall that will keep growing unless revenues are increased, he said. The budget also includes a pay raise of roughly 2.8 percent for county employees.
The tax-rate hike comes despite a 3.4 percent increase in property values - the first in five years - that will boost county tax collections by $8.7 million. The proposed tax increase would bring in an additional $14.1 million.
Both Hillsborough County and the City of St. Petersburg are proposing property tax rates that would be the same or lower than their current tax rates.
Commissioners will officially respond to the LaSala's budget plan at a meeting Tuesday. They admitted that public reaction to a tax increase could be negative.
"Nobody wants new taxes, they never do," said Commissioner Susan Latvala. "We're going to be hearing 'Tax increases, tax increases, tax increases,' and we've got to have a message - one that is sellable to the community."
The message is likely to be that county government is still recovering from severe cuts, a result of the real estate crash that saw property tax collections fall by $147 million. Since 2007, the county has eliminated almost 1,700 positions and reduced its operating budget by 27 percent.
"I think we are just upfront and honest with folks and, you know, in some areas we just cut too much," said Commission Chairman Ken Welch. "This is just getting us back to a sustainable level of service."
The general fund property-tax hike is the second in consecutive years. Under LaSala's proposal, property owners would pay $5.27 for every $1,000 of taxable value, up from $5.01. So the owner of a home valued at $160,000 - roughly, the county average - would see his county tax bill go from $801.60 to $843.20 a year.
The proposed hike to the EMS property tax rate would mean property owners would pay 98 cents for every $1,000 of taxable value, up from 91 cents last year.
The increase in the EMS tax would bring in an extra $3 million per year but must be approved by two-thirds of the seven-member commission. A simple majority vote would be needed to pass the property tax increase.
Part of this years's budget shortfall stemmed from state lawmakers' decision to require employers to pay a higher contribution into the Florida Retirement System, costing the county an extra $5.5 million per year, LaSala said.
The raise for employees, which county leaders have said is needed to retain and attract staff, would be the first raise in five years for many workers.
Under LaSala's proposal, the county will maintain a $12-million stabilization fund and build up reserve funds of $93.2 million, of which $17.5 million would be allocated for disaster recovery, LaSala said.
Even with the proposed tax hikes, the county will have to work to keep costs in line with revenues over the next few years.
"We don't see the opportunity for dramatic whole-scale reductions like we saw in the last several years," he said. "There is not a lot of magic left here in local government budgeting."
County commissioners are scheduled to finalize millage rates by July 30, with TRIM notices being mailed out to residents on Aug. 19.
Two public hearings on the budget are scheduled for Sept. 5 and Sept 17.