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Higher property taxes are not on the table in Hernando County. Cuts and consolidations are.

Commissioners are wrestling with $11.4 million shortfall of their own making.
 
Hernando County Courthouse in Brooksville  JUSTIN TROMBLY | Time
Hernando County Courthouse in Brooksville JUSTIN TROMBLY | Time
Published Jan. 23, 2019

BROOKSVILLE — One truth emerged from a Hernando County Commission budget meeting this week: The view from the top of an $11.4 million financial shortfall is ugly in every possible direction.

Solving the problem with a tax increase would mean charging more than another mill in property tax. That's a roughly $100 increase for the owner of a house with an appraised taxable value of $100,000.

Cutting all county general fund expenses equally would mean taking $5.47 million from the Sheriff's Office budget and more than $3.68 million from other departments, while trimming another $1.35 million from already-depleted reserves.

Other possible solutions could hit employees hard, including department consolidations that could lead to job cuts or cutting already promised pay increases.

Previous coverage: Teamsters say they will not let commissioners' mismanagement strip workers pay

Higher utility fees, separate taxing units for parks and libraries, and closing the popular Cooperative Extension Office and the historic Little Rock Cannery were other options.

Ultimately, commissioners decided that they cannot continue to deficit spend, which they have done in several recent years. They also cannot resolve the painful shortfall in just one year.

They were not willing to increase taxes, so on Tuesday, commissioners told their staff to begin whittling down the shortfall using other steps.

They agreed to explore a new financial arrangement with the sheriff. It wouldn't set up a special taxing district, which has been controversial in the past. Instead, it would create a dependent district, which would maintain current property tax rates for the county and sheriff. It also would relieve the county from having to keep money in reserve to pay for unexpected costs for the sheriff. He would keep his own reserve in the future.

The board also agreed to explore consolidating county information technology efforts under the Property Appraiser's Office, which already handles consolidated mapping and addressing functions. County staff members will look into any duplicated services and how to avoid losing critical information about the technology if employees are let go.

Commissioners also sent the clear message that want departments to scale back.

Information from county property appraiser John Emerson and budget director George Zoettlein provided some small relief. Property values are expected to rise again in the coming year's assessments, but will generate only approximately $1.8 million in new tax revenue. Additional tax dollars also will come from new construction, but those totals are not yet calculated, Emerson said.

But not all of the new numbers will be positive. The electric generating plant of Florida Power Development has been closed and transferred to a new company, which includes Cemex Construction Materials Florida. The plant previously was valued at $160 million for tax purposes, and the previous owners have been in litigation with Emerson's office over several years of disputed tax payments.

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He could not tell commissioners the cost of the tax collection hit from the closed plant or of the litigation.

Zoettlein told commissioners that a simple formula must guide them in the future — county expenses approved in the budget must equal anticipated revenue.

In past years, commissioners considered funds carried forward from a previous year as revenue to be spent. Now such funds should go into reserves, Zoettlein said.

Last fall, the commission approved a budget that did not meet its own reserve policy. Zoettlein told them that — without the 18.5 percent reserve in place — they will be borrowing money at the end of this budget year to make their payroll and pay other bills.

That could mean borrowing nearly $20 million at the end of this fiscal year, Zoettlein said. His plan is to borrow from the county utilities department, then pay it back when property taxes are paid in the first few months of the new fiscal year.

Previous coverage: Hernando County budget year looking bleak already

The county could make headway by forcing 1- or 2-percent cuts from county departments over the next three years, Commissioner Steve Champion said. But Jeff Rogers, deputy county administrator, said it wasn't so simple.

Many county expenses are mandated, and costs cannot be controlled. Plus, minimal cuts per department wouldn't be enough to meet the mandates, he said.

"I'd have to cut staff and costs for the things I can't control,'' he said.

Commissioner John Mitten said he was frustrated by the circumstances and blamed it on mismanagement. He also said it was something that this commission needs to fix.

"I think it's irresponsible to push this on to another commission,'' he said.

Champion agreed.

"It should not have been allowed to happen,'' he said. "We've got to deal with it now.''

Contact Barbara Behrendt at bbehrendt@tampabay.com or (352) 848-1434.