BROOKSVILLE — The depressed housing market has produced another economic curiosity: a larger-than-normal number of people challenging their property values, and a larger number winning.
The county's Value Adjustment Board, which rules on such challenges, recently approved seven cases in which magistrates had recommended adjusted property values for tax purposes.
The bottom line dollarwise was the highest seen in recent memory by the Property Appraiser's Office — a net loss of taxable property value totaling $13.7-million and a tax revenue loss to the county's multiple taxing authorities of $268,755.
With a taxable value countywide topping $10-billion, the amount is relatively small, but for local governments already facing revenue shortfalls from falling property values, legislative actions and constitutional Amendment 1, any additional lost tax revenue means even more governmental penny-pinching.
Losing more than $13-million in property value is significant to Nick Nikkinen, director of special projects for Property Appraiser Alvin Mazourek.
In 2007, appeals of property values cost the county just $4-million in value and $66,831 in tax dollars. The tax revenue loss in 2006 was $24,204 and just $1,435 in 2005.
Nikkinen said the cases that were awarded new taxable values for 2008 have given his office some procedural issues to talk about concerning how some properties are appraised.
The two largest adjustments granted by the Value Adjustment Board for 2008 were for apartment complexes. The Brook Haven complex in Brooksville, as an example, was built recently, and construction costs topped $14-million.
Using that figure, appraisers set the value of the complex at $11.6-million for taxing purposes. The owner challenged the appraisal, and the magistrate agreed with the argument that the value should be tied to the income produced by the not-yet-full complex. The magistrate recommended a reduction in taxable value of $4.4-million. The Value Adjustment Board, made up of two county commissioners, one School Board member and two residents, agreed.
That meant the tax bill for the complex dropped from $249,552 to $154,335.
Another apartment complex in Spring Hill, Suncoast Villa Apartments, also challenged its value and won a $4-million decrease, which saved the business $68,268 in taxes.
The Brooksville Square shopping center at Broad Street and Cortez Boulevard also won a significant decrease in its taxable property value, trimming its value by nearly $2.7-million and its tax bill by $57,739.
Absorbing the tax revenue reductions is just another part of George Zoettlein's challenging job these days. Zoettlein, director of the county's Office of Management and Budget, said that such hits used to be more easily absorbed when he based the county's spending plan on collecting just 95 percent of the taxes the county is owed annually.
When David Hamilton became county administrator last year, he pushed for a more realistic budget and asked that future budgets be built around a collection of 98 percent of the revenue forecast.
"Hopefully that 2 percent cushion will be enough," Zoettlein said.
Brooksville will lose $50,000 in tax revenues because of the Value Adjustment Board's actions.
"To me, that's significant — very significant," City Manager Jennene Norman-Vacha said of the board's property value reductions.
While the total number of appeals filed for 2008 was 330, which was up from the year before, it was not a record. Nikkinen said that the market downturn is a major contributor to the number of people interested in challenging, but it is hard to know whether it is a growing trend.
"Nobody has ever seen a market condition like this," he said. "Houses, properties are supposed to appreciate."
Barbara Behrendt can be reached at email@example.com or (352) 848-1434.