LARGO — To maintain the current property tax rate for the next fiscal year, five of seven city commissioners needed to agree, and that’s exactly what happened Sept. 3.
Despite some calls to lower the rate, commissioners voted 5-2 to keep it unchanged at 5.62 mills in an effort to rebuild reserves that have been tapped to tackle the pandemic.
The rate will remain the same but, thanks to an 8.19% increase in the city’s total taxable property values, property owners will likely still end up paying more taxes.
For residents with a homesteaded property with a taxable value of just over $98,000, which is the average in Largo, maintaining the rate means they would pay an additional $19 next year.
One mill is equal to $1 for every $1,000 of assessed property value.
Meridy Semones, director of the Office of Performance and Budget, said the hike in property values means the current rate would generate just over $2.2 million in additional revenue for the general fund.
In his proposed budget, City Manager Henry Schubert proposed reducing the rate to 5.5 mills. However, the uncertainty of the looming financial impact of COVID-19 gave him second thoughts.
According to Semones, the pandemic has already cost the city more than $3.5 million this year, which includes decreases in user fees, sales tax revenues and gas taxes.
Commissioner Curtis Holmes said he agreed with Schubert’s initial suggestion of lowering the rate to 5.5 mills, which would cost the average homeowner $7 more a year and still generate $1.59 million more than last year.
“There’s a lot of people in the city of Largo who are still hurting from this COVID stuff. Unemployment is still there. These people are still behind on their payments and everything else,” he said, adding that the city also just passed a sewer rate increase.
“I’m looking at the folks who are just trying to get by right now.”
That decision, however, would not boost the city’s reserve funds over the next five years, which has been a stated priority for the commission.
Commissioner Jamie Robinson said he was sympathetic to residents who are financially struggling, but lowering the rate might compromise services that those residents have come to expect.
“I think that we might be putting ourselves in a bad spot for the next couple years by allowing the millage rate to go down,” he said.
Mayor Woody Brown, who joined Holmes in voting against the 5.62 rate, sought a compromise that would help the city and residents.
He said 5.5 mills moves the city in the “wrong direction” in its goal to build the fund balance to 20%, but said a slightly lower rate is still in order.
“I think we can move to 5.6 (mills) and still move in the right direction and give a little bit of a break, even though it’s not a huge break, to our property owners here in the city,” he said.
Compared with the current rate, the move would generate about $100,000 less and would cost residents $2 less annually.
Five commissioners disagreed, though, and voted on first reading to keep the current rate in an effort to weather any potential financial shortfalls.
The city also has some major capital projects on the horizon, including designing and building a new City Hall.
The project is included in the $187.5 million budget for fiscal year 2021, which commissioners unanimously voted to adopt Sept. 3.
The budget is a 7.58% increase over last year and includes $96 million in the general fund.
Highlights include an increase in spending in the police department budget, rescheduling the Central Park 25th anniversary celebration, and 4% salary increases for employees.
A second and final public hearing for both the tax rate and budget will be held Tuesday, Sept. 15.