Palm Beach Gardens considers hiking tax on Internet, cable TV and phone service

PALM BEACH GARDENS — Logging on might cost Mike Gregory about $50 more next year in taxes.

Gregory, like many other Gardens residents, pays a 1.5 percent monthly communications services tax for his Internet, cable television and telephone service. If his monthly bill is $200, he pays an additional $3 tax to the city. That adds up to an annual tax of $36.

On Aug. 11, the council plans to consider raising the tax to 3.5 percent. That same customer with a $200 monthly bill would pay $7 per month. That adds up to an annual tax of $84.

"This is a big tax increase at a bad time," said Fred Scheibl, who, like Gregory, opposes the tax increase.

The council July 19 unanimously approved the tax increase on first reading. At the same meeting, the council voted to keep next year's property tax rate the same as this year's, $5.74 for every $1,000 of assessed value.

The owner of a home assessed at $250,000, with a $50,000 homestead exemption, would pay $1,148. Taxes from the county, state, school and other agencies would be additional.

By keeping the property tax rate the same and raising the communications services tax, the council is approving a "disguised tax," Gregory said.

"Why don't they just man up and increase the property tax? They are more concerned with showboating about not raising the tax rate than they are with leveling with the public," Gregory said.

Mayor David Levy defended the communications tax increase. Raising the tax to 3.5 percent would raise an additional $1.2 million annually, according to city records.

The city receives about three-fourths of its $65 million annual operating budget from city property taxes. The rest comes from sales tax revenue, investment earnings, state revenue sharing and other sources.

"We need to diversify the city's revenue stream away from property taxes," Levy said.

Some opponents to the communications tax increase say they would rather pay higher property taxes. Property owners can deduct a property tax increase on their federal income tax.

"Instead of more taxes, the council should cut spending," Scheibl said.