Pinellas County's roaring real estate market has been dying, and now some new numbers help illustrate the demise.
Preliminary figures released Tuesday by the Property Appraiser's Office show the value of taxable property in Pinellas plunged 8 percent from 2007 to 2008.
That's an unprecedented drop. The office's records only date back to 1989. From then until now, the lone countywide decrease in taxable values was a modest dip of 0.6 percent in 1992.
For local governments, the drop means the same tax rate will bring in less money. And because the changes vary from city to city, neighborhood to neighborhood and street to street, individual taxpayers will see different impacts.
Before showing signs of stalling last year, property values in Pinellas were on steroids, jumping 11 percent in 2004, 15 percent in 2005 and 20 percent in 2006.
"The brakes were put on the market," said chief deputy property appraiser Pam Dubov, "but you also have new exemption benefits that did not exist before."
In fact, market values on the whole slumped 6.7 percent, less than the fall in taxable values. Countywide taxable values, which tend to be lower than market values, dropped from $80-billion on Jan. 1, 2007, to $73.7-billion on Jan. 1, 2008.
Nearly the entire $6.3-billion difference can be traced to Amendment 1, Dubov said. The measure, approved by voters in January, did three things:
• Created an additional homestead exemption of $25,000 for local but not school taxes. That stripped $5.1-billion from the county's taxable property rolls.
• Made some benefits of the Save Our Homes cap portable, which swallowed another $115-million.
• Struck many tangible personal property accounts from tax rolls, removing $200-million.
"Amendment 1 did exactly what voters intended it to do," Dubov said. "It decreased taxable values."
But the estimates are preliminary. While the appraiser's office has revised values on all residential property in Pinellas, values for only half of commercial properties and 60 percent of condos are completed. So the figures may be adjusted over the next month.
Despite the declining market, those who have enjoyed the Save Our Homes cap for several years will still see their taxable values rise.
That's because the Save Our Homes cap allows a 3 percent increase in tax assessments, even if a home's market value falls.
For example, consider a home with a market value of $300,000 and an assessed value of $200,000. If the market value of the home drops 5 percent, or $15,000, it then becomes worth $285,000.
But the Save Our Homes cap allows taxing authorities to increase taxes until they reach market value. So the assessed value can increase by 3 percent, or $6,000, to $206,000. And even in a falling market, that's what you're going to pay taxes on.
For those who don't have a homestead exemption, the drop in property values could mean a significant savings on next year's tax bill.
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Local government officials, facing a new fiscal year on Oct. 1, have eagerly awaited the numbers.
They've been crafting budgets knowing they faced a revenue crunch but were unsure just how big a shortfall was in store.
On Tuesday, some officials took comfort in the appraiser's numbers when their hunches were confirmed. Others missed the mark and will have to adjust.
Largo's preliminary budget, for instance, has been built around a 5 percent reduction in taxable values. But the property appraiser's figures show an 8.3 percent drop.
"We have to make a modification," said Amy Davis, an assistant to the city manager. "It's a little higher than we had hoped, but it's not devastating either."
Safety Harbor officials are developing a budget based on a 10 percent reduction and so were not caught off-guard by a 9 percent drop. Dunedin has been basing its work on an 8.9 percent loss; the city's figure according to the appraiser's office is 9.5 percent.
"We're pretty happy with that," finance director Sandy Sanders said. "Not happy with the numbers, but happy we came close with our projection."
Officials in Tarpon Springs, where taxable value dropped 6.7 percent, said the decrease fell in line with previous estimates — between 6 and 8 percent — that they had been using as a guideline.
"With what's going on, it was what was expected," said Ron Harring, the city's assistant finance director. "It's right around in the area we were thinking about."
County leaders, who must live with an estimated 8 percent drop, had been developing a budget with a 10 percent loss in mind.
"These numbers kind of bear out our estimate," said chief assistant county administrator Mark Woodard. "I don't anticipate any material changes to the process."
Clearwater, which faces a 6.5 percent decrease, has been doing budget work based on a 10 percent drop. Now, instead of taking a $9.2-million punch, the city could be looking at slimming back $5.5-million, said budget director Tina Wilson.
"It's better than what we were bracing for," Wilson said. "But at the same time we expect to see (more decreases) over the next few years."
St. Petersburg is looking at a drop of 5.6 percent, or about a $7-million loss. The city has estimated an $8- to $10-million drop in property tax revenue this year.
Michael Connors, the city's director of internal services, said he was wary of the appraiser's figures.
"It is awful early in the game to go by the property appraiser's numbers," he said. "I wouldn't use those numbers to base a budget on."
As officials grapple with this budget season, uncertainty over the availability of future revenue is widespread. Further limits on the ability of local governments to collect taxes are on the table in Tallahassee.
As for the real estate market, Dubov said it's a question mark. Sales prices appeared to be continuing their slide when she checked a few weeks ago, she said, but there's evidence that more sales agreements are getting inked.
Times staff writers Mike Donila, Rita Farlow, Demorris A. Lee, Eileen Schulte and Cristina Silva contributed to this report. Will Van Sant can be reached at [email protected] or (727) 445-4166.