South Pasadena poised for double-digit property tax rate hike

SOUTH PASADENA — City commissioners are set to decide Sept. 16 whether to raise the city's property tax rate by double digits, warning that keeping the current rate amid a decline in taxable property values would further erode city reserves.

The commission will hold its final public hearing on a 5.8106-mill tax rate and nearly $16 million budget for the fiscal year that begins Oct. 1. Both received tentative approval last week and are scheduled for final votes.

The proposed 5.8106-mill rate is 10% above the rollback rate of 5.2824 mills — and 12.3% higher than the city's current rate of 5.175 mills. The rollback rate brings in the same property tax revenue as the previous year.

For a homesteaded property with a $300,000 assessed value and $250,000 taxable value, the proposed rate would increase the annual city tax bill by about $159, to $1,452.65, city figures show. For a $400,000 property with a $350,000 taxable value, the increase would be about $222, bringing the city tax bill to $2,033.71.

Even with the tax hike, the city expects to use $532,670 in general fund reserves to balance the budget.

At the Sept. 9 commission meeting, resident Shawn Brown questioned why the city needed to raise property taxes and what was driving the increase.

Mayor Arthur Penny pointed to rising costs, including the city's fire department and Pinellas County Sheriff's Office contracts.

“Everything else is just what it costs to run the city,” Penny said.

Brown also asked how Amendment 3, the proposed property tax measure on the November ballot, could affect the city.

Penny said it could cost South Pasadena more than $900,000 in the first year and about $1.2 million in the second. He said the city would have to find another tax, fee or revenue source to replace the lost money because much of it pays for public safety.

When Brown asked whether the city was already making plans for that possibility, Penny simply replied: “Wait and see what happens.”

Finance Director Heather Guadagnoli later underscored the pressure on the city's finances.

“Using the proposed millage rate, we are budgeting a deficit of over $532,000 in the general fund,” she said. “And if you reduce the millage rate below that, it will increase that deficit even further.”

The resolution commissioners will consider puts a number on what would happen if they instead kept the current 5.175-mill rate.

Doing so would generate about $554,000 less revenue and reduce general fund reserves from the equivalent of about 7.7 months of operating expenses to about 6.5 months, according to the resolution.

The resolution also notes that commissioners provided property tax relief following the 2024 hurricanes, absorbing a budget deficit and using reserves.

The tax increase comes as South Pasadena's tax base has shrunk.

The city's total taxable property value fell 0.72%, from $913.9 million to $907.3 million, making it the only one of Pinellas County's 24 municipalities to record a decline on the tax roll certified July 1.

Commissioners already have made substantial cuts to next year's capital spending, including shelving plans for a $15 million replacement City Hall. Instead, the city plans to renovate its existing hurricane-damaged building.

The Sept. 16 meeting begins at 7 p.m. at City Hall, 7047 Sunset Dr. S. Commissioners will vote first on the final tax rate and then on the budget.