BROOKSVILLE — Despite learning this week of an unexpected $168 million increase in property values, the Hernando County Commission voted Thursday not to lower the county's 2011-12 property tax rate.
The extra value could amount to $911,000 in additional property tax revenue in the general fund — a total of $1.12 million in all funds — during the fiscal year that began Saturday. But commissioners balked at lowering the tax rate because much of the new value already has been, or likely will be, challenged by the mining, communications and utilities businesses to which the value has been assessed.
Last year, the county had to refund $1.3 million to taxpayers who challenged their values, including Cemex.
On Thursday, a Cemex attorney, Patrick Risch, told commissioners that the company will continue to fight the county's property assessments because the Cemex north cement plant has been closed for three years and the south plant has been operating at 50 percent capacity for several years, with a 50 percent reduction in work force.
Other counties accept the principle of reduced value for reduced production, Risch said.
The county didn't become aware of the value increase until after the final 2011-12 budget was approved because tangible personal property values for large companies didn't come in until mid-year and took several months to process. Tangible personal property taxes cover equipment and furnishings.
Because of the size of the increase, County Administrator David Hamilton had to make a choice: reduce the tax rate so the higher values would generate the same amount of tax revenue the commission approved in the budget, or do nothing.
Hamilton chose to ask commission Chairman Jim Adkins for an emergency meeting, since there was a deadline to make the decision. Hamilton said Thursday he wanted a public discussion by commissioners so he would know what direction to take.
In the last couple of years, challenges of property values have grown tremendously, John Emerson, chief deputy for Property Appraiser Alvin Mazourek, told the commission. One law firm that specializes in the challenges has been filing them for Cemex all over the country, Emerson said.
"Frankly, sir, they found a cash cow,'' said Commission Dave Russell.
While Russell didn't want to begrudge a company trying to get a fair deal, he said he wanted the board to know that the challenges were different and much more pricey than in the past.
Adkins said he didn't want the county to spend any of the extra property tax revenue that would be raised if the commission didn't lower the tax rate.
If extra money is received, that means the county might not have to borrow as much later this fiscal year from the county's budget stabilization fund, budget manager George Zoettlein told the board.
Both Zoettlein and Hamilton recommended that the commission not lower the tax rate.
"This is a very prudent approach,'' Hamilton said.
But Commissioner Wayne Dukes reminded commissioners that they had already increased the tax rate and, while many homeowners won't see an increase in the amount of tax they pay, businesses will feel the hit. He said he thought that keeping the rate at its current level would make it appear the county was collecting money from businesses "so we have a nest egg.''
"I have a problem with that,'' Dukes said.
Commissioner John Druzbick said that cutting the rate was more of a danger.
"It's just too iffy,'' Druzbick said, noting that if the extra money didn't come in, then the county would be deeper in the hole next year. "It would just put us further behind.''
Adkins, Druzbick and Russell voted to keep the tax rate the same, with Dukes voting no and Jeff Stabins absent.
Commissioners put a condition on their vote. The county will not to spend any extra dollars collected because of the value increase, but rather set them aside to offset the use of reserves that might be needed later in the fiscal year. Spending any of the extra dollars would require a vote of the commission.
Barbara Behrendt can be reached at firstname.lastname@example.org or (352) 848-1434.