Palmetto postpones tax vote in midst of $528,000 budget shortfall

Palmetto officials ended last week’s presentation Wednesday of the 2016-17 fiscal year budget facing a $228,000 budget shortfall, which has grown to a $528,000 shortfall.

Last week, officials were still waiting for results of an employee salary study. City Clerk Jim Freeman anticipated a “big number” since the city has not done a salary study since 2004.

If a millage increase is approved to meet the shortfall, as suggested, it would be back-to-back years the city has had to increase property taxes to balance the budget.

With Commissioner Tambra Varnadore, who vowed to fight against any proposed tax hikes, absent Wednesday, the remaining commissioners opted to wait until Monday’s regular meeting to vote on setting a tentative millage rate, which is due by Aug. 4.

Freeman said the commission has several options, including to approve the full budget presented and raise the millage rate by more than a mill. A mill is $1 for every $1,000 of appraised property value.

“Clearly that’s a lot,” said Freeman. “That’s a big jump. Certainly it’s an option, but it’s also an option for staff to go through what can be scaled back. That doesn’t mean those requests aren’t needed, but we understand reality.”

Other options are to leave the current millage rate flat and have department heads trim budget requests or to slightly raise the millage rate and staff would work to cut where they could.

The $11.2 million city budget is largely challenged in its operational funds. Enterprise funds such as stormwater and utility budgets are balanced, but the general fund will be challenged by the employee salary boost.

Freeman said the first version of the budget presented to the commission included a request to hire for long vacant positions and purchase equipment for parks and recreation as some of the larger expenditure requests.

Freeman said staff could cut $300,000 out of the deficit from those requests, leaving the original $228,000 shortfall, but an increase would still need to be considered. A half-mill increase would increase revenue from property taxes to $230,000.

“We can always set (the millage rate) high and back off of it,” said Commissioner Brian Williams. “It leaves us time to have those discussions.”

The commission can lower the millage rate prior to their September public hearings finalizing the budget, but cannot raise it once set.

Mayor Shirley Groover Bryant said the city would, “have to work it down to where both the commission and the public will support it.”

This story was originally published July 27, 2016 at 8:06 PM with the headline "Palmetto postpones tax vote in midst of $528,000 budget shortfall."