Newspaper article The Florida Times Union

Council Cautious on Tax Rate Cut; Some Fear Peyton's Proposal Too Much

Newspaper article The Florida Times Union

Council Cautious on Tax Rate Cut; Some Fear Peyton's Proposal Too Much

Article excerpt

Byline: Matt Galnor, Times-Union staff writer

Some members of the Jacksonville City Council say tight financial times could make it tough to support the tax rate cut Mayor John Peyton proposed this month.

Tomorrow night, the council will vote on a 1 percent tax rate cut -- far less than Peyton's proposed 3.4 percent reduction, which would be the largest rate drop since 1986-87.

The council's preliminary vote is nothing new. In order to meet state requirements, the council must vote on a rate now even though the budget process won't be done until September. Later, they can always lower the rate, but they cannot increase it.

The difference is that this year, the council may not go back and lower the rate to the mayor's request.

And that would make this council the first not to honor a referendum Jacksonville voters passed in 1991 to place a 3 percent cap on the annual increase in revenue from property taxes. The measure is not binding but has been followed every year since.

In each of the past eight years under former Mayor John Delaney, the council initially gave itself a cushion and, when it found Delaney's planned cut would still cover city costs, went back and cut the rate to Delaney's proposal.

The financial times were rosier then, council members say, and the city is facing its first possible shortfall in a decade.

"If I was trying to make up a shortfall, I wouldn't have cut taxes," said Councilman Warren Alvarez, who runs the council finance committee that will scrutinize the budget. "I would have kind of hung on until I knew what I was doing."

Before submitting his proposed $787 million budget to council July 15, Peyton had to plug a $40 million shortfall to balance the budget.

The gap came from less-than-expected state-shared revenue, an estimated 15 percent increase in health insurance costs and the fact the city owes $35 million in contributions to maintain employee pension funds. …

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