Bradenton May Raise Taxes in Face of $868K Budget Shortfall

Bradenton City Clerk and Treasurer Carl Callahan told the city council Wednesday there is an $868,000 shortfall in next year’s $32.8 million proposed budget unless they come up with ways to cut spending or increase revenues.

At the council workshop session, Callahan outlined the choices based on falling property values and subsequently reduced tax revenues.

He suggested the city council do both: continue to find places to trim spending and establish a tax rate, referred to as the rollback rate, that brings in the same revenues as this year.

The council will vote to set a tentative property tax rate at the July 20 meeting.

Callahan said the rollback millage rate would be $5.20002 for every $1,000 in taxable property value.

After the exemptions, that would be about $20 more a year on a $100,000 house, he said.

This proposed rollback rate would increase city revenues by just $600,000, leaving the council to find another $268,000 in cuts.

Callahan said finding places to cut will be tougher this year because so many reductions have been made over the last several years.

The city's conservative financial policies has won praise from several bond rating institutions, allowing it to maintain a AA rating, the city clerk said, contrary to some of the comments he has heard on the street.

According to a chart the Callahan gave the council, the total taxable value of property in the city fell more than $1 billion from $3.6 billion in 2008 to a projected $2.5 billion in 2012.

Until last year, the city council reduced the tax rate each of those years, even as revenues were shrinking.

When faced with a shortfall last year, the council raised the base property tax rate about 66 cents on every $1,000 in taxable property value to cover an approximate $18,000 shortfall.

Callahan said the city also had a 17 to 18 percent reduction, amounting to about $5 million, in other revenues over the past several years.

“It’s getting to the point where we have to ask the public what level of service do they want,” said Councilman Bemis Smith.

The budget shortfall was largely created by a $600,000 payment the city owes to the employee pension funds.

Employee pensions were a large part of the discussion among the council members.

Smith said the council may have to look at reducing the pension obligation for new employees.

Changes in state law mean that beginning this month some city employees began paying 3 percent of their wages into the pension fund.

For the fourth year in a row, the cit budget does not include a pay raise for city workers.

Councilman Harold Byrd said the council should look into floating general obligation bonds, which will allow the city to purchase capital equipment, such as fire trucks, and pay for them over a number of years.