Monday, April 23, 2018
News Roundup

Hernando County commissioners face tough budget choices

BROOKSVILLE — For the past five years, the process of developing Hernando County's annual spending plan has revolved around one question: How far in the hole are we this year?

It's been no different as the staff and commissioners have put together the 2012-13 budget, though there have been a few new twists.

With property values still in a free fall, tax revenues continue to drop, and commissioners again have faced the angst of choosing whether to raise the tax rate or cut back on services and programs that have already shrunk in the last few years.

From the start this year, commissioners increasingly have looked to the county's constitutional officers to help shoulder the burden of cost cutting.

On Tuesday, the commission will consider tentative approval of a budget that totals $402 million, based partially on a 5 percent increase in the property tax rate to support the budget's general fund. The public hearing begins at 5 p.m. in the commission chambers of the Hernando County Government Center.

The final budget hearing will be at 5 p.m. Sept. 25. The new fiscal year begins Oct. 1.

A survivor of the contentious 2007 public budget hearing in which hundreds of people filled a local church to express their displeasure with government spending and high tax bills, Commissioner Dave Russell said he believes people understand now what the county is facing.

"I think that everybody realizes what needs to get done, and it's just a matter of getting it done,'' Russell said. "The thing is, we have a finite amount of money and lots of stuff to spend it on.''

The county goes into Tuesday's budget hearing still needing to trim between $1.5 million and $1.8 million from board-controlled departments. Budget director George Zoettlein will offer two options: take the money from reserves or cut entire departments.

The final wild card was going to be the sheriff's budget. But late Friday, Sheriff Al Nienhuis announced that he had met his budget goal by finding another $1.3 million to give back to the general fund. Most of that comes from dollars in his various funds that will not be spent at the end of the fiscal year — dollars he would have had to return to the county anyway.

Nienhuis is also counting on reducing what he has to cut by benefitting from the reimbursement the county expects to receive from the judges' judicial improvement fund for a courtroom that was built with general fund money several years ago.

In addition, the sheriff has offered to save the county $300,000 by taking on the county's Animal Services officers.

That move would mesh with the planned reorganization of Animal Services, which has been under fire since an April incident in which a dog was euthanized immediately after it was turned in to the shelter.

The need for the last round of trims from the budgets of the sheriff, the county and other constitutional officers came after the county learned it would be millions of dollars short because of lagging property tax collections.

The county has only gotten about 91 percent of what it should collect in property tax revenue, Zoettlein said. Last year, the county got just 90 percent.

Zoettlein blamed the low payments on property values that were reduced after challenges by the county's largest taxpayer, Cemex, and others, and the sluggish sales of tax certificates.

Even anticipating a lower payment level of taxes didn't help Zoettlein in planning next year's budget, however. By state law, he cannot budget for a collection rate of less than 95 percent. This year, he anticipated 96 percent. In the budget for 2012-13, he has planned on just 95 percent.

The low collection rate was one in a series of financial challenges the county faced this year.

Property values, expected to drop 5 percent, actually dropped 8 percent.

A state challenge of Medicaid bills ended up costing the county $1.3 million it hadn't anticipated, money the commission ended up taking from the capital reserve fund, previously called the judicial center reserve.

The county may also be faced with another hit if a lawsuit over legislation requiring government employees to pay 3 percent of their salaries toward retirement costs is overturned.

In addition, county officials have talked about the need to set aside money so they can offer economic incentives for businesses to expand or set up shop in Hernando County. With the high unemployment rate, business development is key to creating more jobs and improving Hernando's sagging economy, they argue.

Commissioners and staffers this year discussed several creative solutions to improve the county's bleak financial picture, but they didn't get far.

One was to create separate taxing districts for parks and libraries, but commissioners balked at the idea. Instead, they decided to show people on their tax bills how much money goes toward various services. But the state said the county couldn't do that.

The county has filed a challenge.

Russell also brought up the idea of appraising the county's utilities, with the possibility of selling the water and sewer systems to a private entity. And county staffers considered levying a utility surcharge, but commissioners rejected that idea, too.

While the county is still going through with an assessment of the utility operation, it will not have an impact on the budget commissioners consider Tuesday.

The grim financial situation prompted pleas from the property appraiser, tax collector and clerk of court to raise the property tax rate to offset falling property values.

The county attorney's office also chimed in with a strongly worded warning that if the commission didn't take proper steps — and raising revenue was key among them — the county could be pushed "to the brink of bankruptcy in fiscal year 2014."

Ultimately, a divided commission voted to raise the tax rate to what is known as the "rollback rate," or the rate needed to generate the same amount of money for next year as this year.

Commission Chairman Wayne Dukes, who voted against the tax rate increase, said he has not gotten any feedback from constituents as they have received early notice of what their property taxes likely will be for 2012-13.

"I haven't heard a word, and that's kind of surprising,'' Dukes said.

Russell said he hasn't heard much, either, though he has heard from a couple of people whose bills have gone down because their homes values decreased.

He noted that the commission has tried to protect services that the public wants saved, and he said he does not anticipate a crowd Tuesday urging changes in the budget or the proposed tax rate.

"There's not much for people to be up in arms about,'' Russell said. "My concerns, frankly, are about next year. That's what we've got to focus on from the moment we close the books on this budget.''

Barbara Behrendt can be reached at [email protected] or (352) 848-1434.

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