The crash of real estate values has Pasco County officials preparing for a $29-million drop in property taxes next year.
The decrease would be akin to wiping out every dollar for libraries, parks and the public transportation system — and needing to cut millions more.
"It sure is dim and grim news," Commissioner Ann Hildebrand said Wednesday.
A new forecast by the Property Appraiser's Office suggests the property values will drop almost 20 percent overall in Pasco, where home-building had long been an economic pillar.
For the county's general fund alone — the main pot of money that pays for government services — it would mean nearly $25-million less next year. For its special property tax to pay for fire services, there would be a drop of more than $4-million, according to Pasco's budget office.
This year's $980-million budget calls for the county to collect $170-million in property taxes. But top staffers have begun scrutinizing monthly collection totals over fears of a shortfall this year. So far, tax payments have met expectations, budget director Mike Nurrenbrock said.
Next year's forecast has prompted County Administrator John Gallagher to ask his top lieutenants to examine ways to spend less money. A briefing to the County Commission is planned Jan. 27.
Time to cut
County Commissioner Michael Cox said it's too early to say how the county will react. But Gallagher said he favors consolidating county departments before making any dire service cuts or layoffs. He also expects to have money left over from this year's budget to help provide a cushion.
The idea of combining certain services in-house and with other agencies, such as the Sheriff's Office, has met resistance before. For example, Sheriff Bob White and county officials have been at odds over combining the sheriff's communications department with the county agency that handles Fire Rescue calls.
But Gallagher also said some county programs could be protected from deep cuts more than others.
"I haven't gotten to that point (of choosing protected programs)," Gallagher said. "But I will get to that point, because that's just human nature. My first point is to try to find out how much consolidation we can do."
State-mandated property tax cuts have dug into the county's coffers since 2007. They were largely the cause of a $17.8-million drop in property taxes for this year. That prompted a 27 percent reduction to the public libraries' budget, meaning fewer new books and magazines reached the shelves in the award-winning system.
But now the foreclosure-riddled real estate market is the prime culprit for the early estimate of revenue drops for next budget year, Property Appraiser Mike Wells said.
The blow: In one year, real property values in Pasco have taken an $8.2-billion plunge to $31.6-billion, according to the forecast. Those are values before tax breaks, such as the homestead exemption and Save Our Homes savings.
For individual homeowners, property value decreases will vary, depending on neighborhoods and the value of their tax breaks.
Wells warned the ultimate drop could be worse, depending on consumer price index adjustments and what Florida lawmakers do this spring.
A group largely made up of business people plan to ask lawmakers to do the opposite of cutting, however. The panel, spun out of a 2007 county task force on impact fees, intends to ask the county's legislative delegations to support higher taxes on real estate deals.
Now, people pay between 35 cents and 70 cents per $100 of value of property involved in deeds, mortgages and other filings. That tax generated $1.5-million in December — a quarter of the amount collected two years earlier.
They want lawmakers to support adding an additional charge to help Pasco pay for roads and schools.
But the increase has met resistance. State Sen. Mike Fasano, R-New Port Richey, said he won't support any increase.
"I think in light of the budget constraints and what we have heard from the (Legislature's) special session discussion, I would not think they are going to be quick to embrace this particular point," said panel member Ben Harrill, a development lawyer.
David DeCamp can be reached at email@example.com or (800) 333-7505, ext. 6232.