The only Pinellas city with falling property values now faces a tough budget choice

SOUTH PASADENA — Among Pinellas County’s 24 municipalities, this city of retirees holds an unwanted distinction: It was the only one that saw a decline in taxable property values last year.

And that may force cash-strapped city leaders to raise property taxes to the maximum allowed under state law to pay for governmental services.

The South Pasadena City Commission voted unanimously July 1 to certify a proposed maximum tax rate, or millage, of 5.81 mills for the upcoming fiscal year that starts Oct. 1. Commissioners still can lower that tentative tax rate after budget hearings later this summer.

The preliminary tax value roll from the Pinellas County Property Appraiser’s Office shows that as of Jan. 1, tax values in the 1-square-mile community, between St. Petersburg and the Gulf beaches, fell 0.83 percent, from $913.9 million to $906.2 million.

Each year's tax rolls reflect property value changes made in the previous year.

"I'm a little perplexed because out of 24 municipalities in Pinellas County, we are the only one that has a decrease in taxable value," Vice Mayor Thomas B. Reid said.

Finance Director Heather Guadagnoli said the property appraiser's office did not provide an explanation, but she cited the city's relatively small size and the timing of new development.

Despite the overall decline, figures show South Pasadena saw more than $11 million in new construction last year, which Guadagnoli called “substantial.”

"All those improvements for the new construction will increase the property values, not only the taxable values, but you're just not there yet," she said.

Guadagnoli recommended that commissioners certify a maximum rate equal to a 10% increase over the rollback rate, saying the city needs to leave its options open heading into the budget season. The rollback rate raises the same amount of tax revenue as the previous year, minus new construction.

"I know it's not a popular thing to do to raise taxes, but prices are going up," she said.

Mayor Arthur Penny pointed out that commissioners reduced the tax rate beyond the rollback rate last year and waived more than $1 million in permit fees following the 2024 hurricanes even as the city faced rising operating costs and future capital projects.

All governments in Pinellas — such as cities, the school board and the county — are now setting tentative tax rates that will appear on Truth-In-Millage notices.

The property appraiser sends TRIM notices to taxpayers in late July to give them an estimate of their upcoming tax bills and to allow time for taxpayers to voice any objections at public hearings.

The millage that appears on the notices may be lowered later, but not raised, by the taxing authority.

“We’ve got more meetings to process this and decide on a final number,” the mayor said.

South Pasadena has a population of slightly more than 5,000. With a median age of 69, the number of residents has decreased by nearly four percent since the last census in 2020, figures show.