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First, the bad news: Key West taxpayers could face an 8% tax hike for the coming budget year. 

The good news? That’s a worst-case scenario. 

City commissioners approved the tentative tax increase at their initial budget meetings last week, but can — and often do — adjust the tax rate downward between now and the final budget hearing in September.

“By law, we can lower the proposed tax rate that we approved for advertising purposes, but we can’t increase it,” said Commissioner Sam Kaufman, who voted against the 8% spike, even if it is tentative. Commissioner Billy Wardlow also dissented.

“City staff had only recommended a 4% increase,” Kaufman said. “I’d rather see a more phased approach to our salary and staffing increases. Overall I’m pleased with many things in the budget, but I think the 8% is a bit high. To be fair to my colleagues on the commission, though, that figure will likely go down. In past years we’ve approved a tentative increase of up to 8%, but then by the final budget hearing, we got all the way back to rollback with no increase.”

Rollback is the tax rate at which the city — or any government body — will collect the same dollar amount in taxes as it did the previous year, meaning there is no tax increase.

When the city’s finance staff presented the proposed budget to the commissioners, with the recommended 4% tax hike, Finance Director Mark Finigan told the commissioners in an email, “We are still not balanced out. Budgeted expenditures exceed budgeted revenue by over $800,000. We started with a $7 million difference and closed the gap by pushing and pulling from all directions to get to the $800,000 number.”

In the coming weeks, commissioners and city staff will consider new revenue streams and potential areas to reduce spending.

Finigan told the commissioners that the proposed budget — with only a 4% tax increase — includes a $1-per-hour increase in parking fees, a 4% raise for city workers and the addition of 13 new employee positions, including a $120,000-a-year housing coordinator, for which Mayor Teri Johnston has been strongly advocating.

Kaufman said he’d rather save that salary, and instead hire a housing coordinator as a contractor, rather than a full-time employee. “I’d like to look at hiring AH Monroe to be our housing adviser and coordinator. I support having that function, but I don’t think it needs to be a full-time employee.”

Due to the cruise ship reductions, the proposed budget also drops the city’s anticipated cruise ship revenue from about $1 million a year to $54,900 for the coming fiscal year, Kaufman said.

“We’re only budgeting for nine cruise ships all year,” he said, adding that no one knows whether any smaller cruise ships will actually visit Key West.

“I know that’s what the Committee for Safer Cleaner Ships kept saying, and I’ll be thrilled if it happens,” Kaufman said. “But we don’t know with any certainty whether any smaller ships will actually come.”

Finigan also noted in his presentation that the proposed budget does not include any funding for the hiring of outside legal counsel to address an anticipated lawsuit from the owners of Pier B cruise ship dock if the city limits their ability to operate their pier. 

The city has public budget hearings scheduled for Sept. 8 and Sept. 20.

The post TAXES ON THE RISE? KEY WEST OFFICIALS CONSIDER 8% INCREASE appeared first on Florida Keys Weekly Newspapers.

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