Sunday, May 20, 2018
News Roundup

Grim budget picture could prompt higher Pasco property-tax rate

NEW PORT RICHEY — We're not out of the woods yet.

That's the news Pasco's budget guru gave this week in an early look at the 2013 budget. After a grim projection of next year's finances — including a surprisingly large drop in property values and potential higher costs coming from state government — commissioners informally agreed to consider increasing the property tax rate to bring in roughly the same amount of money as this year.

"I think that's what we're going to have to do," said Commission Chairwoman Ann Hildebrand, referring to the so-called "rolled-back" rate. "It really sets the tone for a long, hot summer."

Budget chief Mike Nurrenbrock said he expects property values to decline by about 4 percent this year. Values dropped 2 percent last year, and many officials were hoping the market was close to bottoming out.

If values decrease that much and commissioners keep the existing tax rate, the fire department would lose $1.1 million and the general fund that pays for many county services would lose $5.4 million.

That wasn't the only piece of bad news. The county likely faces higher health insurance and pension costs next year. Proposed legislative changes to Medicaid reimbursements could also put the squeeze on counties.

"Even at the rolled-back rate, you're going to have cuts," said County Administrator John Gallagher. "You're still going to have millions of dollars to make up."

Property appraiser Mike Wells said he couldn't confirm the 4 percent figure because his office is still formulating the early estimate of values that is due in May. "I've always said things are not as bad people say they are," he said. "But I don't have anything to base that on right now. It might be low, it might be high."

A January report from the state Office of Economic and Demographic Research said statewide values will dip by an average of 3.7 percent. Nurrenbrock said many nearby counties are seeing slightly above-average declines.

Commissioner Jack Mariano said it's too early to know how big the drop will be. But he said broaching the subject of the rolled-back rate is useful because of the county's increased costs. "I'm worried about what the Legislature is going to do to us," he said.

The Medicaid legislation centers on bills each county gets for their share of treating low-income residents. Pasco routinely rejects about three-quarters of those bills, mostly because they are for out-of-county residents treated in Pasco hospitals. Even when the state resubmits rejected claims, the county only approves about 20 percent of those.

Overall, the state is trying to recover $325 million in past payments. Pasco's share could be $3.6 million, paid over three years. All future bills would be automatically deducted from sales taxes, and the county could "apply" for refunds. That's another potential hit to county coffers.

And there's one more knock to county revenues on the horizon, though it wouldn't take effect until 2014.

Lawmakers are considering a new homestead exemption for first-time home buyers that would exempt up to half of a home's value from taxation, limited to the county's median value for homestead properties. Anyone who has not owned a home in Florida for three years would qualify for the break. The measure needs a super majority vote in the Legislature and would also need voter approval.

Commissioners adopted the rolled-back tax rate once before, in the 2010 budget year. Commissioner Ted Schrader said commissioners were giving early direction so Nurrenbrock can start crafting the budget. "It gives us a little bit of latitude and flexibility, and we can certainly bring that number down," he said.

Under the rolled-back option, the tax rate would increase from $7.78 for every $1,000 of assessed value to $8.19. For a $150,000 home with standard exemptions, that would be roughly $40 more in taxes.

Of course, that figure assumes a person's house keeps its value. If a home's value drops by the countywide average of 4 percent, the homeowner's tax bill should stay the same. Because of falling values, many homeowners actually saw a tax break this year after commissioners left the tax rate unchanged.

Lee Logan can be reached at [email protected] or (727) 869-6236.

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