BROOKSVILLE — Hernando County commissioners voted Tuesday to hold fast to the property tax rate they approved last month and bank any extra money that an unexpected increase in property values might bring.
The county on Friday received notice that the final value of property in Hernando was more than 3 percent greater than the estimate provided by Property Appraiser Alvin Mazourek in July. County officials based their 2010-11 spending plan on the lower number.
The commission had to call a special meeting since it had just three days, under state law, to decide what to do about the increased value.
If the new valuation holds true, the county would receive $1.39 million more in its general fund and a total of $1.77 million more in property tax revenues in all funds for the coming year. But Mazourek warned commissioners that those numbers might be overly optimistic.
Actual final values aren't determined until all value challenges are settled, and several large claims are still looming, Mazourek said.
He explained that the increase in value was largely due to the value of tangible personal property of five large mining, communication and utility companies. Mazourek said he lost two of his most highly qualified people who had been dealing with tangible personal property and hired a consultant to handle that part of the tax roll this year.
The consultant came in with higher values, and the companies have challenged those values. Three are going directly to court to challenge.
Tangible personal property tax is levied against equipment and furnishings; and this year's challenges involve a new argument that major equipment, such as the kilns used to make cement, are worth less when they are not used as much, such as during the current down economy.
Determining value on such properties is complex, Mazourek said. In addition to the large companies that are challenging their assessments, he also noted that there have been 451 separate challenges of values that could potentially be heard by the Value Adjustment Board, which meets in January.
That is 101 more than the previous record of filed petitions. Mazourek said he expects some will be settled before going before the Value Adjustment Board, but he said he cannot predict how the overall county value will end up or if additional tax revenues will be generated for the county.
"There are a lot of variables,'' Commissioner David Russell said. "This money is obscure at best.''
He made the motion to keep the tax rate at its previously approved level — a total countywide rate of 6.3431 mills, the equivalent of $6.34 in tax for every $1,000 of appraised taxable property value. That's the same rate as 2009-10.
Commissioner Rose Rocco asked if there could be some relief from the new park and recreation fees that the county has imposed if the extra dollars were actually received, but no other commissioner spoke up.
The vote to keep the previously approved tax rate was 4-1, with Rocco opposed.
Even with the new fiscal year having just begun on Oct. 1, county budget director George Zoettlein is predicting that planning for the 2011-12 budget must take into account a deficit that could range between $5 million and $7 million.
County staffers and commissioners spent months over the summer struggling to make up the revenue deficit expected in the current year. The smaller revenue total, caused by property values that continue to fall, forced the county to eliminate positions, cut services and raise fees.
Most years the county's final budget hearing is the end of the discussion about tax rates because the final valuation usually is about the same as the July estimate. This year, the values attached to all county funds except Spring Hill Fire Rescue increased by more than 3 percent. If values increase more than 1 percent, the county can alter the tax rate to bring in the same amount of tax revenue as was originally anticipated.
Zoettlein said that such jumps in value are rare.
Barbara Behrendt can be reached at firstname.lastname@example.org or (352) 848-1434.