Approval of a property tax referendum on the November election ballot likely would delay Wildwood’s capital projects, but not result in a tax rate increase.
In a memo to commissioners, City Manager Jason McHugh wrote that the property tax rate of $2.83 per $1,000 assessed valuation could remain the same without a reduction in services.
The referendum, which as a constitutional amendment requires a 60 percent majority, would increase the Florida Homestead Credit from $50,000 to $150,000 next year and to $250,000 the following year.
It would require the Legislature and municipalities to formulate plans to eliminate property taxes.
School taxes would be exempt from the cuts as are taxes for police, fire and ambulance services. Local governments would be able to levy taxes for road and bridge, stormwater and flood control projects.
Annual property assessment increases would be limited to 5 percent.
As municipalities prepare their budgets for the Oct. 1 fiscal year, they must factor in the possibility the referendum will succeed.
Losing an estimated $6.4 million in property tax revenue next year may delay projects like the recreation center, the Martin Theater redevelopment, Clay Drain Road improvements and stormwater projects, McHugh wrote.
Of greater concern is the potential elimination of property taxes and other cuts will be considered, according to McHugh.
They include eliminating cost-of-living pay increases, shifting a portion of benefit costs to employees and reducing training and funding for special events.
Employee program and pavement preservation expenses could be cut and participants in athletic events could be asked to pay more.
McHugh wrote that he will ask commissioners for other ideas at the city’s July 20 budget workshop.
“While staff strives to present a conservative and transparent budget each year, our budgeting practices need to evolve to ensure ad valorem taxes are utilized in accordance with the Legislature’s intent,” he wrote.