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Tax Plan Could Cost Tampa, Hillsborough $85 Million

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By ELLEN GEDALIUS and ANTHONY MCCARTNEY, The Tampa Tribune

Published: November 14, 2007

TAMPA - Hillsborough County and Tampa could face a combined $85 million hit if voters in January approve a constitutional amendment designed to lower property taxes.

That has government officials bracing for more cuts and looking for ways to run more efficiently.

The numbers from the county and city are preliminary at best, and are likely to rise. County estimates include a guess about how much "portability" will cost; city officials have not yet made a similar calculation.

Budget directors said they do not yet know how to calculate the effect of portability because they don't know how to estimate how many people would take advantage of the provision.

In January, voters will be asked to consider a constitutional amendment that would double the homestead exemption from $25,000 to $50,000, give homeowners "portability" by allowing them to transfer the Save Our Homes tax benefits to a new homestead, allow businesses to exempt up to $25,000 of tangible property, and cap nonhomesteaded properties' annual valuations at 10 percent.

Estimates show Hillsborough County could lose $69 million to $75 million in property taxes next budget year - more than the $56 million in cuts the county made to this year's budget.

Hillsborough officials say some of the losses will be offset by a $30 million cushion they built into the 2009 budget in anticipation of future revenue cuts.

"We have some ability to absorb that," Budget Director Eric Johnson said.

The losses would represent about 7 percent of the $801 million in property taxes that Hillsborough County government collected this year. Property taxes pay for a number of key services, including the budgets of the sheriff's office, fire department, code enforcement and planning agencies.

The effects are likely to be long-lasting, county officials said.

"This is a permanent ratcheting down," Johnson said.

Bonnie Wise, Tampa's director of revenue and finance, said the referendum could cost the city $8 million to $10 million in revenue, not including the portability component.

Several months ago, Tampa implemented a hiring freeze and laid off about 120 employees in response to the Legislature's forced property tax cuts. The city also made cuts in service, such as closing pools and shortening the hours at community centers.

The city received about $20 million less than expected for the current fiscal year.

A hiring freeze instituted in April remains in effect, Wise said. Only critical positions are being filled. The county has a similar policy.

Wise said the topic of further layoffs hasn't been addressed yet.

Without providing specifics, Mayor Pam Iorio said in an e-mail Tuesday that "we are looking at ways the city can do business differently to save money. This will be a long-term process."

Hillsborough County Property Appraiser Rob Turner said portability is leading to a lot of uncertainty about how much local governments will be affected by property tax reforms.

Although he said he's not campaigning for or against the referendum, he said the portability aspect has the potential to jump-start Florida's stagnating real estate market.

Turner, who for years has called for property tax reforms, said the reductions are important because they'll give homeowners and families relief. That's more important than the effects on local governments, he said.

"If they have been overspending and need to cut back some more, that's what needs to happen," Turner said.

Reporter Ellen Gedalius can be reached at (813) 259-7679 or egedalius@tampatrib.com. Reporter Anthony McCartney can be reached at (813) 259-7616 or amccartney@tampatrib.com.

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