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Date of Issue: February 06, 2008

Island cities, county face Amendment 1 reality

While Island voters overwhelmingly approved passage of Amendment 1, which will give Florida homeowners another $25,000 exemption from property taxes, the reality of the measure is that municipalities are faced with additional loss of revenue. Cities are now going to have to do more “belt-tightening.”

Anna Maria Mayor Fran Barford and her staff estimated before the election that the city would lose about $30,000 in ad valorem tax revenues, not a large chunk of change when dealing with a $2.4 million budget.

But Amendment 1 comes on the heels of the 9 percent spending cut mandated last year by the Legislature. So the $30,000 is “a lot of money for our city” under the present circumstances, she said. “It’s all relative.”

“We’re just going to have to tighten our belts some more,” Barford observed, indicating that at budget time she and her and the staff will do some serious “numbers-crunching” and take a long look at every line item.

The objective, she said, is to maintain city services at the highest level possible within the framework of revenues, even if they decline.

“We won’t sacrifice the health, safety and welfare of our residents. That will be at the top of our list,” pledged the mayor.

However, the city will look at alternative revenue sources such as the “adopt-a-beach-access” program, she concluded.

In Holmes Beach, Mayor Rich Bohnenberger and staff have estimated the impact of Amendment 1 at between $80,000 and $100,000 less revenue, an amount he believes the city can deal with.

“I don’t think we’ll have any difficulty dealing with that amount. We’re down to the ‘bare bones’ in staff and there are other cuts we can look at,” the mayor said.

But even $80,000-$100,000 is an estimate. The city needs to know the complete impact of the amendment on revenues, he indicated.

“We are still unsure of the big picture. We need to know the impact of portability before the next budget cycle,” he said. “My big concern is what’s coming next from the [legislature’s] taxation and revenue committee.”

He also noted that with the construction slowdown, income from permit fees has slowed considerably. Additionally, the state revenue sharing program for municipalities will likely provide less money than in prior years.

“But we can cope with this,” Bohnenberger said confidently.

Newly elected Bradenton Beach Mayor Mike Pierce said he wouldn’t have the full impact figures for about another month, but “there will be some serious changes” to the next budget.

“There will be some belt-tightening,” Pierce said, echoing Barford. “A lot of people didn’t understand that when it passed.”

Once the “health, safety and welfare” of city residents are taken care of in the new budget, “then, everything else gets looked at for whether or not we need it,” Pierce said.

For Manatee County, the impact is significantly higher.

“We’ve already estimated a $15 million loss of revenue,” said County Commissioner Carol Whitmore.

“But there’s no need to panic,” she added.

“We are probably going to have to cut some services, but let’s go in with a positive attitude. We’re elected to do what the voters want and this is what they want.”

And no one should think the county is headed for higher taxes to make up any shortfall caused by Amendment 1.

“I have no intention of raising taxes,” Whitmore said. “I didn’t as mayor of Holmes Beach and won’t now. We’ll just figure out a way to make it work.”

Likewise for Bohnenberger, Pierce and Barford.

Neither plan on any recommendation for a higher tax rate in their cities.

“We’ll just tighten up and move forward,” said Barford.

Don Schroder of the Coalition Against Runaway Taxation said his organization was disappointed that Amendment 1 passed for several reasons, not the least of which is the possibility that successful lawsuits on the portability portion of the amendment “could remove the Save Our Homes” tax increase limitation currently in effect.

CART still supports the 1.35 percent across-the-board maximum annual tax increase as this accounts for both homesteaded and non-homestead properties, including business property.

And, he added, there is still no cap on municipal spending. Schroder also noted that with the anticipated decline in revenues for the 2008 budget cycle, municipal governments “still have the option of raising fees and taxes” to meet the demand for services.