LARGO – When Commissioner John Carroll pushed for a property tax increase during a work session in August, he said the city would need the reserves in case a hurricane struck.
Hurricane Irma helped make Carroll’s point even more relevant Sept. 5 when the City Commission voted 5-2 on first reading to increase property taxes by 13.42 percent to 5.7413 mills, or about $48 for the average Largo homeowner. Mayor Woody Brown and Commissioner Curtis Holmes voted against the increase.
“As we’ve talked about before, we talked about a day when we would have to make some tough decisions on millage rate and here we are,” Carroll said. “So, I’m sticking to my guns on this thing and I think it’s the way to go.”
The rate, which would equal $5.74 for each $1,000 in taxable value, would give the General Fund a $3.5 million increase. For a Largo homeowner with a homesteaded property valued at $139,227, the annual taxes would be $512. Carroll noted, however, that tax bills would still increase by $15 if the tax rate remained the same at 5.3705 mills.
Only St. Petersburg (6.7550 mills) and Belleair (5.9257 mills) would have higher tax rates than Largo’s proposed rate, though, so Mayor Woody Brown said he would prefer a smaller increase to 5.5705 mills.
“At the tentative rate of 5.5705, that’s a 10 percent increase on taxes, and I personally think that’s a big enough increase,” he said.
Carroll disagreed, citing the city’s 10 percent fund balance, which is about three months’ worth of operating expenses. He also added that the city’s catastrophe relief fund was only about $3 million.
The higher tax rate would increase the balance to 14.7 percent by the end of fiscal year 2018 and 16.4 percent by the end of FY 2022.
“We are in uncertain times about what the future holds for us on our ability to adjust these millage rates,” Carroll said. “Somebody somewhere thinks that a 10 percent fund balance is enough, and I absolutely do not. So, we may not have this same luxury next year if we need to make an adjustment.”
Beginning in FY 2019, the city also is facing $3.8 million in budget reductions because of several challenges, including a constitutional amendment on the November 2018 ballot that would increase the homestead exemption by $25,000. If approved, it will cost the city $650,000 in revenue beginning in FY 2020.
OMB Manager Meridy Semones said the 5.7413 tax rate would mean the city could push back those reductions to FY 2020 and they would be reduced to $1.5 million.
Commissioner Donna Holck said the hurricane bearing down on Florida now is a good example of why it is important for the city to prepare for later.
“We’ve all been taught to save and think ahead,” she said. “... So, by being better prepared now I feel like we are in the best interest of our citizens of Largo.”
A second public hearing on the rate is scheduled for 6 p.m. Tuesday, Sept. 19, at City Hall, 201 Highland Ave.